-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, L/bQDsIvkCIAGG3EGzeRdibXyzUdMGESFIy8KNuGbwfTTwDiruPYF8uVe7b2he9z Q/J13B6AJh+OLVHs9MD5zA== 0000950152-95-002603.txt : 19951119 0000950152-95-002603.hdr.sgml : 19951119 ACCESSION NUMBER: 0000950152-95-002603 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 11 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951113 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CENTERIOR ENERGY CORP CENTRAL INDEX KEY: 0000774197 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 341479083 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-09130 FILM NUMBER: 95591053 BUSINESS ADDRESS: STREET 1: 6200 OAK TREE BLVD CITY: INDEPENDENCE STATE: OH ZIP: 44131 BUSINESS PHONE: 2164473100 MAIL ADDRESS: STREET 1: PO BOX 94661 CITY: CLEVELAND STATE: OH ZIP: 44101-4661 FORMER COMPANY: FORMER CONFORMED NAME: NORTH HOLDING CO /OH/ DATE OF NAME CHANGE: 19851002 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CLEVELAND ELECTRIC ILLUMINATING CO CENTRAL INDEX KEY: 0000020947 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 340150020 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-02323 FILM NUMBER: 95591054 BUSINESS ADDRESS: STREET 1: 55 PUBLIC SQ STREET 2: PO BOX 5000 CITY: CLEVELAND STATE: OH ZIP: 44101 BUSINESS PHONE: 2166229800 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TOLEDO EDISON CO CENTRAL INDEX KEY: 0000352049 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRIC SERVICES [4911] IRS NUMBER: 344375005 STATE OF INCORPORATION: OH FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-03583 FILM NUMBER: 95591055 BUSINESS ADDRESS: STREET 1: 300 MADISON AVE CITY: TOLEDO STATE: OH ZIP: 43652 BUSINESS PHONE: 4192495000 10-Q 1 CENTERIOR ENERGY, C.E.I, TOLEDO EDISON CO. 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) [ X ] Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended SEPTEMBER 30, 1995 OR [ ] Transition report pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934 For the transition period from _____ to _____
Commission Registrant; State of Incorporation; I.R.S. Employer File Number Address; and Telephone Number Identification No. - ----------- ----------------------------------- ------------------ 1-9130 CENTERIOR ENERGY CORPORATION 34-1479083 (An Ohio Corporation) 6200 Oak Tree Boulevard Independence, Ohio 44131 Telephone (216) 447-3100 1-2323 THE CLEVELAND ELECTRIC 34-0150020 ILLUMINATING COMPANY (An Ohio Corporation) 55 Public Square Cleveland, Ohio 44113 Telephone (216) 622-9800 1-3583 THE TOLEDO EDISON COMPANY 34-4375005 (An Ohio Corporation) 300 Madison Avenue Toledo, Ohio 43652 Telephone (419) 249-5000
Indicate by check mark whether each of the registrants (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrants were required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No _____ _____ On November 8, 1995, there were 148,031,503 shares of Centerior Energy Corporation Common Stock outstanding. Centerior Energy Corporation is the sole holder of the 79,590,689 shares and 39,133,887 shares of common stock of The Cleveland Electric Illuminating Company and The Toledo Edison Company, respectively, outstanding on that date. 2 This combined Form 10-Q is separately filed by Centerior Energy Corporation ("Centerior Energy"), The Cleveland Electric Illuminating Company ("Cleveland Electric") and The Toledo Edison Company ("Toledo Edison"). Centerior Energy, Cleveland Electric and Toledo Edison are sometimes referred to collectively as the "Companies". Cleveland Electric and Toledo Edison are sometimes collectively referred to as the "Operating Companies". Information contained herein relating to any individual registrant is filed by such registrant on its behalf. No registrant makes any representation as to information relating to any other registrant, except that information relating to either or both of the Operating Companies is also attributed to Centerior Energy. TABLE OF CONTENTS
Page ---- PART I. FINANCIAL INFORMATION CENTERIOR ENERGY CORPORATION AND SUBSIDIARIES THE CLEVELAND ELECTRIC ILLUMINATING COMPANY THE TOLEDO EDISON COMPANY Notes to the Financial Statements (Unaudited) 1 CENTERIOR ENERGY CORPORATION AND SUBSIDIARIES Income Statement 4 Balance Sheet 5 Cash Flows 6 Management's Discussion and Analysis of Financial 7 Condition and Results of Operations THE CLEVELAND ELECTRIC ILLUMINATING COMPANY Income Statement 11 Balance Sheet 12 Cash Flows 13 Management's Discussion and Analysis of Financial 14 Condition and Results of Operations THE TOLEDO EDISON COMPANY Income Statement 18 Balance Sheet 19 Cash Flows 20 Management's Discussion and Analysis of Financial 21 Condition and Results of Operations PART II. OTHER INFORMATION Item 5. Other Information 24 Item 6. Exhibits and Reports on Form 8-K 30 Signatures 31 Exhibit Index 32
-i- 3 CENTERIOR ENERGY CORPORATION AND SUBSIDIARIES, THE CLEVELAND ELECTRIC ILLUMINATING COMPANY AND THE TOLEDO EDISON COMPANY NOTES TO THE FINANCIAL STATEMENTS (UNAUDITED) (1) Interim Financial Statements Centerior Energy Corporation (Centerior Energy) is the parent company of Centerior Service Company (Service Company); two electric utilities, The Cleveland Electric Illuminating Company (Cleveland Electric) and The Toledo Edison Company (Toledo Edison); and five other wholly owned subsidiaries. The two utilities are referred to collectively herein as the "Operating Companies" and individually as an "Operating Company". Centerior Energy, Cleveland Electric and Toledo Edison are referred to collectively herein as the "Companies". The comparative income statement and balance sheet and the related statement of cash flows of each of the Companies have been prepared from the records of each of the Companies without audit by independent public accountants. In the opinion of management, all adjustments necessary for a fair statement of financial position at September 30, 1995 and results of operations for the three months and nine months ended September 30, 1995 and 1994 have been included. All such adjustments were normal recurring adjustments. These financial statements and notes should be read in conjunction with the financial statements and notes included in the Companies' combined Annual Report on Form 10-K for the year ended December 31, 1994 (1994 Form 10-K) and the Quarterly Reports on Form 10-Q for the quarter ended March 31, 1995 (First Quarter 1995 Form 10-Q) and the quarter ended June 30, 1995 (Second Quarter 1995 Form 10-Q). These interim period financial results are not necessarily indicative of results for a 12-month period. In August 1995, Cleveland Electric formed a wholly owned subsidiary to serve as the transferor in connection with an asset-backed securitization expected to be completed within the next few months. At September 30, 1995, the subsidiary was not yet funded. (2) Equity Distribution Restrictions The Operating Companies can make cash available for the funding of Centerior Energy's common stock dividends by paying dividends on their respective common stock, which is held solely by Centerior Energy. Federal law prohibits the Operating Companies from paying dividends out of capital accounts. However, the Operating Companies may pay preferred and common stock dividends out of appropriated retained earnings and current earnings. At September 30, 1995, Cleveland Electric and Toledo Edison had $239.5 million and $165.2 million, respectively, of appropriated retained earnings for the payment of dividends. However, Toledo Edison is prohibited from paying a common stock dividend by a provision in its mortgage that essentially requires such dividends to be paid out of the total balance of retained earnings, which currently is a deficit. 4 (3) Common Stock Dividends Cash dividends per common share declared by Centerior Energy during the nine months ended September 30, 1995 and 1994 were as follows: 1995 1994 Paid February 15 $.20 $.20 Paid May 15 .20 .20 Paid August 15 .20 .20 Paid November 15 .20 .20 Common stock cash dividends declared by Cleveland Electric during the nine months ended September 30, 1995 and 1994 were as follows: 1995 1994 (millions) Paid in February $ - $18.6 Paid in May 15.0 24.2 Paid in August 29.6 24.3 Also, during the third quarter of 1994, Cleveland Electric declared property dividends totaling $25.6 million for the transfer of its investments in three wholly owned subsidiaries to Centerior Energy. Toledo Edison did not declare any common stock dividends during the nine months ended September 30, 1995 and 1994. (4) Financing Activity During the three months ended September 30, 1995, the Operating Companies issued and redeemed or retired debt and preferred stock as follows: Cleveland Electric Cleveland Electric issued $45.15 million principal amount of First Mortgage Bonds, 7-3/4% Series due 2025-A, as collateral security for the sale by a public authority of an equal principal amount of tax-exempt bonds. The proceeds from the sale of the public authority's bonds were used in refunding at 102% of face value an equal principal amount of the authority's tax-exempt bonds that were issued in 1985 with a 10.5% interest rate. Concurrently with the refunding of the authority's 1985 bonds, Cleveland Electric's first mortgage bonds securing the authority's 1985 bonds were redeemed. Cleveland Electric also issued $40.9 million principal amount of First Mortgage Bonds, 7.70% Series due 2025-B, and $2.9 million principal amount of First Mortgage Bonds, 7.70% Series due 2025-C, as collateral security for the sale by two other public authorities of equal principal amounts of tax-exempt bonds. The proceeds from the sales of the public authorities' bonds were used in refunding at face value equal principal amounts of the authorities' 5 tax-exempt bonds that were issued in 1985 with a variable interest rate (8.75% most recently). Concurrently with the refunding of the authorities' 1985 bonds, Cleveland Electric's first mortgage bonds securing those issues were redeemed. Mandatory redemptions consisted of $70 million aggregate principal amount of secured medium-term notes; $1.7 million of first mortgage bonds, bank loans and pollution control notes; and $1 million of Serial Preferred Stock, $7.35 Series C. Also, Cleveland Electric optionally purchased and retired 1,000 shares of Serial Preferred Stock, $90.00 Series S, for $0.9 million. Toledo Edison Toledo Edison issued $35 million principal amount of First Mortgage Bonds, 7-3/4% Series due 2020-A, as collateral security for the sale by a public authority of an equal principal amount of tax-exempt bonds. The proceeds from the sale of the public authority's bonds were used in refunding at 102% of face value $30 million principal amount of the authority's tax-exempt bonds that were issued in 1985 with a 12.25% interest rate and for the redemption of $5 million principal amount of the authority's maturing tax-exempt bonds that were issued in 1985 with a 10.75% interest rate. Concurrently with the refunding of the authority's 1985 bonds, Toledo Edison's pollution control notes securing those issues were redeemed. Toledo Edison also issued $19 million principal amount of First Mortgage Bonds, 7-3/4% Series due 2020-B, as collateral security for the sale by the same public authority of an equal principal amount of tax-exempt bonds. At September 30, 1995, the proceeds of the new issue had been irrevocably deposited in escrow for the November 1995 refunding at 102% of face value of an equal principal amount of the authority's tax-exempt bonds that were issued in 1985 with a 10.75% interest rate. The authority's 1985 bonds were collaterally secured by Toledo Edison's pollution control note. In the balance sheet at September 30, 1995, the asset for the escrowed amount was offset against the total amount of the long-term debt obligation. Toledo Edison also repaid a $35 million bank loan originally due in July 1996 with an annual interest rate of 9.17%. Other mandatory redemptions consisted of $10 million of Cumulative Preferred Stock, $25 par value, $2.81 Series; and $1 million of bank loans and other long-term debt. (5) Commitments and Contingencies Various legal actions, claims and regulatory proceedings covering several matters are pending against the Companies. See "Item 3. Legal Proceedings" in the 1994 Form 10-K and "Part II, Item 5. Other Information" in this Quarterly Report on Form 10-Q and in the First and Second Quarter 1995 Form 10-Qs. 6 CENTERIOR ENERGY CORPORATION AND SUBSIDIARIES INCOME STATEMENT (Unaudited) (Thousands, Except Per Share Amounts)
Three Months Ended Nine Months Ended September 30, September 30, --------------------- ------------------------- 1995 1994 1995 1994 -------- -------- ---------- ---------- OPERATING REVENUES $ 739,579 $ 666,985 $ 1,934,105 $ 1,850,989 OPERATING EXPENSES Fuel and Purchased Power 127,914 112,342 361,008 332,663 Other Operation and Maintenance 167,818 137,453 458,973 444,579 Generation Facilities Rental Expense, Net 39,873 39,768 119,576 119,302 Depreciation and Amortization 70,420 72,478 209,891 208,389 Taxes, Other Than Federal Income Taxes 81,961 82,318 246,341 247,903 Deferred Operating Expenses, Net (16,772) (14,877) (47,542) (45,591) Federal Income Taxes 63,827 51,882 114,769 95,556 -------- -------- ---------- ---------- Total Operating Expenses 535,041 481,364 1,463,016 1,402,801 -------- -------- ---------- ---------- OPERATING INCOME 204,538 185,621 471,089 448,188 NONOPERATING INCOME Allowance for Equity Funds Used During Construction 120 1,197 1,766 3,291 Other Income and Deductions, Net (2,094) 1,416 1,176 6,105 Deferred Carrying Charges 11,804 10,009 34,999 29,711 Federal Income Taxes - Credit (Expense) 254 (928) (2,543) (3,672) -------- -------- ---------- ---------- Total Nonoperating Income 10,084 11,694 35,398 35,435 -------- -------- ---------- ---------- INCOME BEFORE INTEREST CHARGES 214,622 197,315 506,487 483,623 INTEREST CHARGES Long-Term Debt 89,204 87,818 263,939 263,249 Short-Term Debt 1,744 2,130 7,315 5,376 Allowance for Borrowed Funds Used During Construction (197) (1,200) (1,960) (3,334) -------- -------- ---------- ---------- Net Interest Charges 90,751 88,748 269,294 265,291 -------- -------- ---------- ---------- INCOME AFTER INTEREST CHARGES 123,871 108,567 237,193 218,332 Preferred Dividend Requirements of Subsidiaries 14,959 16,429 46,113 49,655 -------- -------- ---------- ---------- NET INCOME $ 108,912 $ 92,138 $ 191,080 $ 168,677 ======== ======== ========== ========== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 148,032 148,023 148,032 147,780 ======== ======== ========== ========== EARNINGS PER COMMON SHARE $ .74 $ .62 $ 1.29 $ 1.14 ======== ======== ========== ========== The accompanying notes as they relate to Centerior Energy are an integral part of this statement.
7 CENTERIOR ENERGY CORPORATION AND SUBSIDIARIES BALANCE SHEET (Thousands)
September 30, December 31, 1995 1994 (Unaudited) ----------- ----------- ASSETS PROPERTY, PLANT AND EQUIPMENT Utility Plant In Service $ 9,742,349 $ 9,769,996 Accumulated Depreciation and Amortization (2,987,593) (2,906,106) ----------- ----------- 6,754,756 6,863,890 Construction Work In Progress 98,167 129,495 ----------- ----------- 6,852,923 6,993,385 Nuclear Fuel, Net of Amortization 215,840 293,222 Other Property, Less Accumulated Depreciation 101,800 50,018 ----------- ----------- 7,170,563 7,336,625 CURRENT ASSETS Cash and Temporary Cash Investments 235,413 186,399 Amounts Due from Customers and Others, Net 257,606 211,178 Unbilled Revenues 82,344 93,344 Materials and Supplies, at Average Cost 126,340 139,293 Fossil Fuel Inventory, at Average Cost 26,282 28,684 Taxes Applicable to Succeeding Years 108,615 251,877 Other 17,604 14,822 ----------- ----------- 854,204 925,597 DEFERRED CHARGES AND OTHER ASSETS Amounts Due from Customers for Future Federal Income Taxes 1,059,193 1,046,317 Unamortized Loss from Beaver Valley Unit 2 Sale 97,329 100,698 Unamortized Loss on Reacquired Debt 90,044 85,921 Carrying Charges and Operating Expenses 1,039,478 957,053 Nuclear Plant Decommissioning Trusts 99,843 81,967 Other 156,076 157,278 ----------- ----------- 2,541,963 2,429,234 ----------- ----------- $ 10,566,730 $ 10,691,456 =========== =========== CAPITALIZATION AND LIABILITIES CAPITALIZATION Common Stock Equity $ 1,954,432 $ 1,881,930 Preferred Stock With Mandatory Redemption Provisions 220,440 252,656 Without Mandatory Redemption Provisions 450,871 450,871 Long-Term Debt 3,791,754 3,697,082 ----------- ----------- 6,417,497 6,282,539 CURRENT LIABILITIES Current Portion of Long-Term Debt and Preferred Stock 222,665 373,451 Current Portion of Lease Obligations 91,642 83,099 Accounts Payable 163,292 143,919 Accrued Taxes 216,253 384,114 Accrued Interest 97,704 89,556 Dividends Declared 44,428 15,376 Other 69,368 59,964 ----------- ----------- 905,352 1,149,479 DEFERRED CREDITS AND OTHER LIABILITIES Unamortized Investment Tax Credits 264,907 278,824 Accumulated Deferred Federal Income Taxes 1,843,756 1,778,429 Unamortized Gain from Bruce Mansfield Plant Sale 505,333 525,020 Accumulated Deferred Rents for Bruce Mansfield Plant and Beaver Valley Unit 2 150,186 138,619 Nuclear Fuel Lease Obligations 156,917 219,465 Retirement Benefits 177,718 176,221 Other 145,064 142,860 ----------- ----------- 3,243,881 3,259,438 COMMITMENTS AND CONTINGENCIES (Note 5) ----------- ----------- $ 10,566,730 $ 10,691,456 =========== =========== The accompanying notes as they relate to Centerior Energy are an integral part of this statement.
8 CENTERIOR ENERGY CORPORATION AND SUBSIDIARIES CASH FLOWS (Unaudited) (Thousands)
Nine Months Ended September 30, ------------------------ 1995 1994 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income $191,080 $168,677 -------- -------- Adjustments to Reconcile Net Income to Cash from Operating Activities: Depreciation and Amortization 209,891 208,389 Deferred Federal Income Taxes 52,248 85,218 Unbilled Revenues 11,000 23,000 Deferred Fuel 11,438 (17,646) Deferred Carrying Charges (34,999) (29,711) Leased Nuclear Fuel Amortization 92,682 72,771 Deferred Operating Expenses, Net (47,542) (45,591) Allowance for Equity Funds Used During Construction (1,766) (3,291) Changes in Amounts Due from Customers and Others, Net (46,428) (22,928) Changes in Inventories 15,355 (7,167) Changes in Accounts Payable 19,373 (47,180) Changes in Working Capital Affecting Operations (9,829) 146 Other Noncash Items 8,362 16,176 -------- -------- Total Adjustments 279,785 232,186 -------- -------- Net Cash from Operating Activities 470,865 400,863 CASH FLOWS FROM FINANCING ACTIVITIES First Mortgage Bond Issues 541,850 -- Common Stock Issues -- 11,902 Maturities, Redemptions and Sinking Funds (636,413) (107,286) Nuclear Fuel Lease Obligations (69,298) (93,155) Common Stock Dividends Paid (88,819) (88,621) Premiums, Discounts and Expenses (13,955) (973) -------- -------- Net Cash from Financing Activities (266,635) (278,133) CASH FLOWS FROM INVESTING ACTIVITIES Cash Applied to Construction (114,686) (149,160) Interest Capitalized as Allowance for Borrowed Funds Used During Construction (1,960) (3,334) Contributions to Nuclear Plant Decommissioning Trusts (11,794) (6,896) Other Cash Applied (26,776) (14,303) -------- -------- Net Cash from Investing Activities (155,216) (173,693) -------- -------- NET CHANGE IN CASH AND TEMPORARY CASH INVESTMENTS 49,014 (50,963) CASH AND TEMPORARY CASH INVESTMENTS AT BEGINNING OF PERIOD 186,399 225,253 -------- -------- CASH AND TEMPORARY CASH INVESTMENTS AT END OF PERIOD $235,413 $174,290 ======== ======== Other Payment Information: Interest (net of amounts capitalized) $217,000 $216,000 Federal Income Taxes 77,900 1,100 The accompanying notes as they relate to Centerior Energy are an integral part of this statement.
9 CENTERIOR ENERGY CORPORATION AND SUBSIDIARIES MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Capital Resources and Liquidity Reference is made to "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in Item 7 of the 1994 Form 10-K and in the First and Second Quarter 1995 Form 10-Qs. The information under "Capital Resources and Liquidity" remains unchanged with the following exceptions: During the third quarter of 1995, the Companies completed financings as discussed in Note 4. Within the next few months, the Operating Companies plan to complete the sale of substantially all of their retail customer accounts receivable and unbilled revenues in connection with asset-backed securitization agreements which will provide for the periodic sale, assignment and repurchase of such accounts. The aggregate net proceeds to the Operating Companies from the sale of the accounts receivable are expected to be in the range of $140 million to $170 million. Each Operating Company will use the net proceeds for general corporate purposes. Additional first mortgage bonds may be issued by the Operating Companies under their respective mortgages on the basis of property additions, cash or refund- able first mortgage bonds. If the applicable interest coverage test is met, each Operating Company may issue first mortgage bonds on the basis of property additions and, under certain circumstances, refundable bonds. At September 30, 1995, Cleveland Electric and Toledo Edison would have been permitted to issue approximately $365 million and $283 million of additional first mortgage bonds, respectively. Under its articles of incorporation, Toledo Edison cannot issue preferred stock unless certain earnings coverage requirements are met. At September 30, 1995, Toledo Edison would have been permitted to issue approximately $87 million of additional preferred stock at an assumed dividend rate of 12%. Results of Operations Factors contributing to the 10.9% and 4.5% increases in 1995 operating revenues from 1994 for the third quarter and nine months, respectively, are shown as follows: 10
Changes for Period Ended September 30, 1995 Three Nine Factors Months Months (millions) Kilowatt-hour Sales Volume and Mix $62.7 $64.0 Wholesale Revenues 7.9 11.2 Fuel Cost Recovery Revenues 0.5 15.0 Miscellaneous Revenues 1.5 (7.1) Total $72.6 $83.1
Percentage changes between 1995 and 1994 billed electric kilowatt-hour sales are summarized as follows:
Changes for Period Ended September 30, 1995 Three Nine Customer Categories Months Months Residential 19.0% 2.8% Commercial 5.6 1.9 Industrial 0.8 0.9 Other 47.0 37.6 Total 11.0 5.1
Third quarter 1995 total kilowatt-hour sales increased because of much hotter summer weather than that in 1994. The hot summer weather in 1995 boosted residential, commercial and wholesale sales. Weather-normalized residential sales increased 3.1% for the 1995 period, while weather-normalized commercial sales decreased 0.7%. Wholesale sales (included in the "Other" category) increased 64%. Industrial sales increased slightly as increased sales to petroleum refineries and the broad-based, smaller industrial customer group entirely offset lower sales to the other large industrial customers. Total kilowatt-hour sales increased for the nine-month period in 1995 because of the hotter summer weather in 1995. The hot summer weather in 1995 resulted in higher residential, commercial and wholesale sales. Weather-normalized residential sales were 0.3% lower for the 1995 nine-month period than for the 1994 period, while weather-normalized commercial sales increased 0.1%. Wholesale sales increased 63%. Industrial sales increased slightly as increased sales to petroleum refineries and the broad-based, smaller industrial customer group entirely offset lower sales to the other large industrial customers. Wholesale sales and revenues in 1994 were suppressed by soft market conditions and limited power availability for bulk power transactions because of generating plant outages. 11 The increases in 1995 fuel cost recovery revenues included in customer bills resulted from changes in the fuel cost recovery factors used by the Operating Companies to calculate these revenues. The weighted average of the respective fuel cost recovery factors used for the third quarter of 1995 increased 7% for Cleveland Electric and decreased 4.4% for Toledo Edison compared to the weighted average of the respective fuel cost recovery factors used for the third quarter of 1994. The weighted average of the respective fuel cost recovery factors used for the 1995 nine-month period increased 13.2% for Cleveland Electric and decreased 7.5% for Toledo Edison compared to the weighted average of the respective fuel cost recovery factors used for the 1994 nine-month period. Miscellaneous revenues decreased for the 1995 nine-month period from the 1994 amount primarily because the 1994 amount included the billings to other utility owners and lessees for overhead expenses related to the 1994 refueling and maintenance outage of the jointly owned Perry Nuclear Power Plant Unit 1. Third quarter operating expenses in 1995 increased 11.2% from the 1994 amount. Increased other operation and maintenance expenses resulted from higher power production expenses related to increased generation and third quarter 1995 charges for an ongoing inventory reduction program and the cancellation of certain capital projects. Fuel and purchased power expenses increased primarily because of higher fuel expense attributable to increased generation and more amortization of previously deferred fuel costs than the amount amortized in 1994. Federal income taxes increased as a result of higher pretax operating income. Third quarter depreciation and amortization expenses in 1995 decreased from the 1994 amount primarily because the 1994 third quarter amount included the true-up adjustments for nuclear plant decommissioning expense accruals for the first six months of 1994. This incremental expense was recorded in September 1994 when the cost estimates were revised. An increase in deferred operating expenses resulted primarily from increased deferrals for depreciation and postretirement benefits other than pensions in the 1995 period pursuant to the Rate Stabilization Program. The Rate Stabilization Program was approved by The Public Utilities Commission of Ohio (PUCO) for the Operating Companies in 1992. Third quarter 1995 credits for carrying charges relating to the Rate Stabilization Program increased from the 1994 amount primarily because of the larger base (which is related to net property additions since 1989) subject to the carrying charge calculation. Nine-month operating expenses in 1995 increased 4.3% from the 1994 amount. Fuel and purchased power expenses increased as higher fuel expense was partially offset by lower purchased power expense. The higher fuel expense was attributable to increased generation and more amortization of previously deferred fuel costs than the amount amortized in 1994. The lower purchased power expense resulted from the increased availability of the nuclear generating units in the 1995 period. Other operation and maintenance expenses increased primarily because of the third quarter 1995 charges related to inventory and canceled capital projects. Federal income taxes increased as a result of higher pretax operating income. 12 The nine-month 1995 credits for carrying charges relating to the Rate Stabilization Program increased from the 1994 amount primarily because of the larger base (which is related to net property additions since 1989) subject to the carrying charge calculation. Outlook--Rate Matters The Operating Companies continue to take action to increase revenues through the enhanced marketing plan and to control costs. The full impact of these efforts will take time. Also, as discussed in Note 5 in the First Quarter 1995 Form 10-Q, each Operating Company filed a request with the PUCO in April 1995 for a rate increase to be effective in 1996. As part of the Rate Stabilization Program, during the 1992-1995 period the Operating Companies are allowed to defer and subsequently recover certain costs not currently recovered in rates and to accelerate the amortization of certain benefits. These cost deferrals and accelerated amortizations totaled $44.3 million and $129.7 million for the 1995 third quarter and nine-month period, respectively. These regulatory accounting deferrals and amortizations will end in the fourth quarter of 1995. On November 3, 1995, the PUCO's staff (Staff) issued its report (Staff Report) relating to the Operating Companies' rate increase requests. In the Staff Report, the Staff recommended that the PUCO grant Cleveland Electric and Toledo Edison annual increases of $83.9 million and $35.2 million, respectively; however, the Staff recommended that rate relief be conditioned upon the Operating Companies' acceptance of a PUCO recommendation that the Operating Companies "commit to a significant revaluation of their asset bases over some finite period of time." The recommended conditional rate increases represent the full amounts requested by the Operating Companies. The Companies are evaluating the Staff Report and will have an opportunity to challenge recommendations with which they disagree during the hearing phase of the rate cases expected in December 1995. A PUCO decision is expected in the first quarter of 1996. For additional information, see "Part II, Item 5. Other Information -- 1. 1995 Rate Requests" in this Quarterly Report on Form 10-Q. 13 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY INCOME STATEMENT (Unaudited) (Thousands)
Three Months Ended Nine Months Ended September 30, September 30, --------------------- ------------------------- 1995 1994 1995 1994 -------- -------- ---------- ---------- OPERATING REVENUES $ 525,833 $ 473,969 $ 1,360,578 $ 1,296,628 OPERATING EXPENSES Fuel and Purchased Power (1) 110,104 98,475 317,997 290,446 Other Operation and Maintenance 113,421 90,980 308,390 294,764 Generation Facilities Rental Expense, Net 13,892 13,892 41,675 41,675 Depreciation and Amortization 49,290 50,488 146,777 146,117 Taxes, Other Than Federal Income Taxes 58,288 58,818 174,535 176,862 Deferred Operating Expenses, Net (11,229) (9,225) (31,686) (29,251) Federal Income Taxes 47,140 38,840 81,592 67,750 -------- -------- ---------- ---------- Total Operating Expenses 380,906 342,268 1,039,280 988,363 -------- -------- ---------- ---------- OPERATING INCOME 144,927 131,701 321,298 308,265 NONOPERATING INCOME Allowance for Equity Funds Used During Construction 290 860 1,256 2,437 Other Income and Deductions, Net 804 1,619 1,941 4,731 Deferred Carrying Charges 7,991 6,303 23,354 18,766 Federal Income Taxes - Credit (Expense) (538) (617) (1,441) (2,579) -------- -------- ---------- ---------- Total Nonoperating Income 8,547 8,165 25,110 23,355 -------- -------- ---------- ---------- INCOME BEFORE INTEREST CHARGES 153,474 139,866 346,408 331,620 INTEREST CHARGES Long-Term Debt 62,889 60,624 184,194 181,137 Short-Term Debt 844 890 2,638 2,823 Allowance for Borrowed Funds Used During Construction (236) (1,097) (1,614) (3,002) -------- -------- ---------- ---------- Net Interest Charges 63,497 60,417 185,218 180,958 -------- -------- ---------- ---------- NET INCOME 89,977 79,449 161,190 150,662 Preferred Dividend Requirements 10,452 11,329 32,127 34,197 -------- -------- ---------- ---------- EARNINGS AVAILABLE FOR COMMON STOCK $ 79,525 $ 68,120 $ 129,063 $ 116,465 ======== ======== ========== ========== (1) Includes purchased power expense for purchases from Toledo Edison. $ 25,939 $ 27,716 $ 75,496 $ 84,329 The accompanying notes as they relate to Cleveland Electric are an integral part of this statement.
14 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY BALANCE SHEET (Thousands)
September 30, December 31, 1995 1994 (Unaudited) ----------- ----------- ASSETS PROPERTY, PLANT AND EQUIPMENT Utility Plant In Service $ 6,860,312 $ 6,870,651 Accumulated Depreciation and Amortization (2,064,243) (2,013,775) ----------- ----------- 4,796,069 4,856,876 Construction Work In Progress 71,914 99,376 ----------- ----------- 4,867,983 4,956,252 Nuclear Fuel, Net of Amortization 130,294 173,745 Other Property, Less Accumulated Depreciation 59,276 20,575 ----------- ----------- 5,057,553 5,150,572 CURRENT ASSETS Cash and Temporary Cash Investments 92,921 65,643 Amounts Due from Customers and Others, Net 181,478 146,412 Amounts Due from Affiliates 4,452 5,002 Unbilled Revenues 62,500 71,500 Materials and Supplies, at Average Cost 85,662 94,563 Fossil Fuel Inventory, at Average Cost 18,263 16,186 Taxes Applicable to Succeeding Years 75,992 179,716 Other 6,936 4,343 ----------- ----------- 528,204 583,365 DEFERRED CHARGES AND OTHER ASSETS Amounts Due from Customers for Future Federal Income Taxes 650,882 641,249 Unamortized Loss on Reacquired Debt 62,109 57,827 Carrying Charges and Operating Expenses 633,284 578,302 Nuclear Plant Decommissioning Trusts 54,013 44,211 Other 100,106 95,114 ----------- ----------- 1,500,394 1,416,703 ----------- ----------- $ 7,086,151 $ 7,150,640 =========== =========== CAPITALIZATION AND LIABILITIES CAPITALIZATION Common Stock Equity $ 1,153,641 $ 1,058,190 Preferred Stock With Mandatory Redemption Provisions 215,420 245,971 Without Mandatory Redemption Provisions 240,871 240,871 Long-Term Debt 2,709,897 2,543,036 ----------- ----------- 4,319,829 4,088,068 CURRENT LIABILITIES Current Portion of Long-Term Debt and Preferred Stock 163,574 281,785 Current Portion of Lease Obligations 52,354 47,403 Accounts Payable 84,389 87,954 Accounts and Notes Payable to Affiliates 55,215 117,635 Accrued Taxes 180,626 309,724 Accrued Interest 70,771 62,210 Dividends Declared 6,656 18,075 Other 39,646 33,028 ----------- ----------- 653,231 957,814 DEFERRED CREDITS AND OTHER LIABILITIES Unamortized Investment Tax Credits 183,726 192,151 Accumulated Deferred Federal Income Taxes 1,279,790 1,233,830 Unamortized Gain from Bruce Mansfield Plant Sale 314,741 326,930 Accumulated Deferred Rents for Bruce Mansfield Plant 91,006 84,454 Nuclear Fuel Lease Obligations 96,547 132,180 Retirement Benefits 63,779 59,471 Other 83,502 75,742 ----------- ----------- 2,113,091 2,104,758 COMMITMENTS AND CONTINGENCIES (Note 5) ----------- ----------- $ 7,086,151 $ 7,150,640 =========== =========== The accompanying notes as they relate to Cleveland Electric are an integral part of this statement.
15 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY CASH FLOWS (Unaudited) (Thousands)
Nine Months Ended September 30, ----------------------- 1995 1994 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income $161,190 $150,662 -------- -------- Adjustments to Reconcile Net Income to Cash from Operating Activities: Depreciation and Amortization 146,777 146,117 Deferred Federal Income Taxes 36,106 43,704 Unbilled Revenues 9,000 15,000 Deferred Fuel 13,900 (21,785) Deferred Carrying Charges (23,354) (18,766) Leased Nuclear Fuel Amortization 52,552 39,966 Deferred Operating Expenses, Net (31,686) (29,251) Allowance for Equity Funds Used During Construction (1,256) (2,437) Changes in Amounts Due from Customers and Others, Net (35,066) (17,227) Changes in Inventories 6,824 (2,578) Changes in Accounts Payable (3,565) (48,856) Changes in Working Capital Affecting Operations (16,558) 10,527 Other Noncash Items (2,438) 5,475 -------- -------- Total Adjustments 151,236 119,889 -------- -------- Net Cash from Operating Activities 312,426 270,551 CASH FLOWS FROM FINANCING ACTIVITIES Notes Payable to Affiliates (58,100) 19,200 First Mortgage Bond Issues 442,850 -- Maturities, Redemptions and Sinking Funds (428,455) (55,353) Nuclear Fuel Lease Obligations (39,776) (51,115) Dividends Paid (77,078) (101,494) Premiums, Discounts and Expenses (8,644) (761) -------- -------- Net Cash from Financing Activities (169,203) (189,523) CASH FLOWS FROM INVESTING ACTIVITIES Cash Applied to Construction (89,534) (124,366) Interest Capitalized as Allowance for Borrowed Funds Used During Construction (1,614) (3,002) Contributions to Nuclear Plant Decommissioning Trusts (6,408) (3,652) Other Cash Applied (18,389) (9,038) -------- -------- Net Cash from Investing Activities (115,945) (140,058) -------- -------- NET CHANGE IN CASH AND TEMPORARY CASH INVESTMENTS 27,278 (59,030) CASH AND TEMPORARY CASH INVESTMENTS AT BEGINNING OF PERIOD 65,643 77,374 -------- -------- CASH AND TEMPORARY CASH INVESTMENTS AT END OF PERIOD $92,921 $18,344 ======== ======== Other Payment Information: Interest (net of amounts capitalized) $149,000 $148,000 Federal Income Taxes 60,300 11,300 The accompanying notes as they relate to Cleveland Electric are an integral part of this statement.
16 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Capital Resources and Liquidity Reference is made to "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in Item 7 of the 1994 Form 10-K and in the First and Second Quarter 1995 Form 10-Qs. The information under "Capital Resources and Liquidity" remains unchanged with the following exceptions: During the third quarter of 1995, Cleveland Electric completed financings as discussed in Note 4. Within the next few months, Cleveland Electric plans to complete the sale of substantially all of its retail customer accounts receivable and unbilled revenues in connection with asset-backed securitization agreements which will provide for the periodic sale, assignment and repurchase of such accounts. The net proceeds from the sale of the accounts receivable are expected to be in the range of $100 million to $120 million. Cleveland Electric will use the net proceeds for general corporate purposes. Additional first mortgage bonds may be issued by Cleveland Electric under its mortgage on the basis of property additions, cash or refundable first mortgage bonds. If the applicable interest coverage test is met, Cleveland Electric may issue first mortgage bonds on the basis of property additions and, under certain circumstances, refundable bonds. At September 30, 1995, Cleveland Electric would have been permitted to issue approximately $365 million of additional first mortgage bonds. Results of Operations Factors contributing to the 10.9% and 4.9% increases in 1995 operating revenues from 1994 for the third quarter and nine months, respectively, are shown as follows:
Changes for Period Ended September 30, 1995 Three Nine Factors Months Months (millions) Kilowatt-hour Sales Volume and Mix $40.6 $ 39.9 Wholesale Revenues 5.3 8.7 Fuel Cost Recovery Revenues 5.1 25.0 Miscellaneous Revenues 0.9 (9.6) Total $51.9 $ 64.0
17 Percentage changes between 1995 and 1994 billed electric kilowatt-hour sales are summarized as follows:
Changes for Period Ended September 30, 1995 Three Nine Customer Categories Months Months Residential 18.3% 2.2% Commercial 5.0 1.9 Industrial 0.7 0.2 Other 46.6 57.0 Total 10.3 5.2
Third quarter 1995 total kilowatt-hour sales increased because of much hotter summer weather than that in 1994. The hot summer weather in 1995 boosted residential, commercial and wholesale sales. Weather-normalized residential and commercial sales increased 4% and 0.4%, respectively, for the 1995 period. Wholesale sales (included in the "Other" category) increased 58%. Industrial sales increased slightly as increased sales to the broad-based, smaller industrial customer group entirely offset lower sales to the largest industrial customers. Total kilowatt-hour sales increased for the nine-month period in 1995 because of the hotter summer weather in 1995. The hot summer weather in 1995 resulted in higher residential, commercial and wholesale sales. Weather-normalized residential sales were 0.8% lower for the 1995 nine-month period than for the 1994 period, while weather-normalized commercial sales increased 0.6%. Wholesale sales increased 98%. Industrial sales increased slightly as increased sales to the broad-based, smaller industrial customer group entirely offset lower sales to the largest industrial customers. Wholesale sales and revenues in 1994 were suppressed by soft market conditions and limited power availability for bulk power transactions because of generating plant outages. The increases in 1995 fuel cost recovery revenues included in customer bills resulted from increases in the fuel cost recovery factors used in 1995 to calculate these revenues compared to those used in 1994. The increases in the weighted averages of the fuel cost recovery factors for 1995 were 7% and 13.2% for the third quarter and nine months, respectively. Miscellaneous revenues decreased for the 1995 nine-month period from the 1994 amount primarily because the 1994 amount included the billings to other utility owners and lessees for overhead expenses related to the 1994 refueling and maintenance outage of the jointly owned Perry Nuclear Power Plant Unit 1. Third quarter operating expenses in 1995 increased 11.3% from the 1994 amount. Increased other operation and maintenance expenses resulted from higher power production expenses related to increased generation and third quarter 1995 charges for an ongoing inventory reduction program and the cancellation of certain capital projects. Fuel and purchased power expenses increased 18 primarily because of higher fuel expense attributable to increased generation and more amortization of previously deferred fuel costs than the amount amortized in 1994. Federal income taxes increased as a result of higher pretax operating income. Third quarter depreciation and amortization expenses in 1995 decreased from the 1994 amount primarily because the 1994 third quarter amount included the true-up adjustments for nuclear plant decommissioning expense accruals for the first six months of 1994. This incremental expense was recorded in September 1994 when the cost estimates were revised. An increase in deferred operating expenses resulted primarily from increased deferrals for depreciation and postretirement benefits other than pensions in the 1995 period pursuant to the Rate Stabilization Program. The Rate Stabilization Program was approved by The Public Utilities Commission of Ohio (PUCO) for Cleveland Electric in 1992. Third quarter 1995 credits for carrying charges relating to the Rate Stabilization Program increased from the 1994 amount primarily because of the larger base (which is related to net property additions since 1989) subject to the carrying charge calculation. Nine-month operating expenses in 1995 increased 5.2% from the 1994 amount. Fuel and purchased power expenses increased as higher fuel expense was partially offset by lower purchased power expense. The higher fuel expense was attributable to increased generation and more amortization of previously deferred fuel costs than the amount amortized in 1994. The lower purchased power expense resulted from the increased availability of the nuclear generating units in the 1995 period. Other operation and maintenance expenses increased primarily because of the third quarter 1995 charges related to inventory and canceled capital projects. Federal income taxes increased as a result of higher pretax operating income. The nine-month 1995 credits for carrying charges relating to the Rate Stabilization Program increased from the 1994 amount primarily because of the larger base (which is related to net property additions since 1989) subject to the carrying charge calculation. A decrease in investment and other income which lowered "Other Income and Deductions, Net" partially offset the carrying charge increase. A decrease in the nine-month federal income tax provision for nonoperating income in 1995 also contributed to the increase in nonoperating income. Outlook--Rate Matters Cleveland Electric continues to take action to increase revenues through the enhanced marketing plan and to control costs. The full impact of these efforts will take time. Also, as discussed in Note 5 in the First Quarter 1995 Form 10-Q, Cleveland Electric filed a request with the PUCO in April 1995 for a rate increase to be effective in 1996. As part of the Rate Stabilization Program, during the 1992-1995 period Cleveland Electric is allowed to defer and subsequently recover certain costs not currently recovered in rates and to accelerate the amortization of certain benefits. These cost deferrals and accelerated amortizations totaled $28.7 million and $83.5 million for the 1995 third quarter and nine-month period, respectively. These regulatory accounting deferrals and amortizations will end in the fourth quarter of 1995. On November 3, 1995, the PUCO's staff (Staff) issued its report (Staff Report) relating to Cleveland Electric's rate increase request. In the Staff Report, the Staff recommended that the PUCO grant Cleveland Electric an annual increase of $83.9 million; however, the Staff recommended that rate relief be conditioned upon Cleveland Electric's acceptance of a PUCO recommendation that 19 Cleveland Electric "commit to a significant revaluation of its asset base over some finite period of time." The recommended conditional rate increase represents the full amount requested by Cleveland Electric. Cleveland Electric is evaluating the Staff Report and will have an opportunity to challenge recommendations with which it disagrees during the hearing phase of the rate case expected in December 1995. A PUCO decision is expected in the first quarter of 1996. For additional information, see "Part II, Item 5. Other Information -- 1. 1995 Rate Requests" in this Quarterly Report on Form 10-Q. 20 THE TOLEDO EDISON COMPANY INCOME STATEMENT (Unaudited) (Thousands)
Three Months Ended Nine Months Ended September 30, September 30, --------------------- --------------------- 1995 1994 1995 1994 -------- -------- -------- -------- OPERATING REVENUES (1) $ 245,830 $ 227,447 $ 667,257 $ 660,471 OPERATING EXPENSES Fuel and Purchased Power 44,239 42,018 120,196 129,041 Other Operation and Maintenance 60,881 53,425 169,553 170,038 Generation Facilities Rental Expense, Net 25,981 25,876 77,901 77,627 Depreciation and Amortization 21,130 21,990 63,114 62,271 Taxes, Other Than Federal Income Taxes 23,555 23,326 71,452 70,517 Deferred Operating Expenses, Net (5,543) (5,653) (15,856) (16,341) Federal Income Taxes 16,730 13,105 33,404 28,099 -------- -------- -------- -------- Total Operating Expenses 186,973 174,087 519,764 521,252 -------- -------- -------- -------- OPERATING INCOME 58,857 53,360 147,493 139,219 NONOPERATING INCOME Allowance for Equity Funds Used During Construction (169) 336 510 853 Other Income and Deductions, Net (2,905) 780 223 2,402 Deferred Carrying Charges 3,813 3,706 11,645 10,945 Federal Income Taxes - Credit (Expense) 1,100 (158) (182) (536) -------- -------- -------- -------- Total Nonoperating Income 1,839 4,664 12,196 13,664 -------- -------- -------- -------- INCOME BEFORE INTEREST CHARGES 60,696 58,024 159,689 152,883 INTEREST CHARGES Long-Term Debt 26,315 27,195 79,746 82,112 Short-Term Debt 905 1,983 5,370 3,923 Allowance for Borrowed Funds Used During Construction 39 (104) (346) (332) -------- -------- -------- -------- Net Interest Charges 27,259 29,074 84,770 85,703 -------- -------- -------- -------- NET INCOME 33,437 28,950 74,919 67,180 Preferred Dividend Requirements 4,507 5,099 13,986 15,457 -------- -------- -------- -------- EARNINGS AVAILABLE FOR COMMON STOCK $ 28,930 $ 23,851 $ 60,933 $ 51,723 ======== ======== ======== ======== (1) Includes revenues from bulk power sales to Cleveland Electric. $ 25,939 $ 27,716 $ 75,496 $ 84,329 The accompanying notes as they relate to Toledo Edison are an integral part of this statement.
21 THE TOLEDO EDISON COMPANY BALANCE SHEET (Thousands)
September 30, December 31, 1995 1994 (Unaudited) ----------- ----------- ASSETS PROPERTY, PLANT AND EQUIPMENT Utility Plant In Service $ 2,882,037 $ 2,899,345 Accumulated Depreciation and Amortization (923,350) (892,331) ----------- ----------- 1,958,687 2,007,014 Construction Work In Progress 26,252 30,119 ----------- ----------- 1,984,939 2,037,133 Nuclear Fuel, Net of Amortization 85,547 119,477 Other Property, Less Accumulated Depreciation 19,015 5,994 ----------- ----------- 2,089,501 2,162,604 CURRENT ASSETS Cash and Temporary Cash Investments 101,822 87,800 Amounts Due from Customers and Others, Net 73,192 61,794 Amounts Due from Affiliates 18,590 18,929 Unbilled Revenues 19,844 21,844 Materials and Supplies, at Average Cost 40,678 44,730 Fossil Fuel Inventory, at Average Cost 8,019 12,498 Taxes Applicable to Succeeding Years 32,623 72,160 Other 3,523 2,369 ----------- ----------- 298,291 322,124 DEFERRED CHARGES AND OTHER ASSETS Amounts Due from Customers for Future Federal Income Taxes 408,552 405,308 Unamortized Loss from Beaver Valley Unit 2 Sale 97,329 100,698 Unamortized Loss on Reacquired Debt 27,935 28,094 Carrying Charges and Operating Expenses 406,194 378,751 Nuclear Plant Decommissioning Trusts 45,830 37,755 Other 62,607 66,798 ----------- ----------- 1,048,447 1,017,404 ----------- ----------- $ 3,436,239 $ 3,502,132 =========== =========== CAPITALIZATION AND LIABILITIES CAPITALIZATION Common Stock Equity $ 745,332 $ 684,568 Preferred Stock With Mandatory Redemption Provisions 5,020 6,685 Without Mandatory Redemption Provisions 210,000 210,000 Long-Term Debt 1,081,857 1,154,046 ----------- ----------- 2,042,209 2,055,299 CURRENT LIABILITIES Current Portion of Long-Term Debt and Preferred Stock 59,091 82,891 Current Portion of Lease Obligations 39,288 35,696 Accounts Payable 75,835 48,190 Accounts Payable to Affiliates 29,207 30,701 Accrued Taxes 34,957 74,909 Accrued Interest 26,737 27,027 Other 17,566 16,566 ----------- ----------- 282,681 315,980 DEFERRED CREDITS AND OTHER LIABILITIES Unamortized Investment Tax Credits 81,181 86,673 Accumulated Deferred Federal Income Taxes 560,148 540,836 Unamortized Gain from Bruce Mansfield Plant Sale 190,592 198,089 Accumulated Deferred Rents for Bruce Mansfield Plant and Beaver Valley Unit 2 59,180 54,165 Nuclear Fuel Lease Obligations 60,371 87,285 Retirement Benefits 102,904 102,897 Other 56,973 60,908 ----------- ----------- 1,111,349 1,130,853 COMMITMENTS AND CONTINGENCIES (Note 5) ----------- ----------- $ 3,436,239 $ 3,502,132 =========== =========== The accompanying notes as they relate to Toledo Edison are an integral part of this statement.
22 THE TOLEDO EDISON COMPANY CASH FLOWS (Unaudited) (Thousands)
Nine Months Ended September 30, ------------------------ 1995 1994 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income $74,919 $67,180 -------- -------- Adjustments to Reconcile Net Income to Cash from Operating Activities: Depreciation and Amortization 63,114 62,271 Deferred Federal Income Taxes 16,244 42,521 Unbilled Revenues 2,000 8,000 Deferred Fuel (2,463) 4,139 Deferred Carrying Charges (11,645) (10,945) Leased Nuclear Fuel Amortization 40,131 32,805 Deferred Operating Expenses, Net (15,856) (16,341) Allowance for Equity Funds Used During Construction (510) (853) Changes in Amounts Due from Customers and Others, Net (11,398) (6,337) Changes in Inventories 8,531 (4,589) Changes in Accounts Payable 27,645 (7,532) Changes in Working Capital Affecting Operations (2,014) (26,057) Other Noncash Items 10,800 10,701 -------- -------- Total Adjustments 124,579 87,783 -------- -------- Net Cash from Operating Activities 199,498 154,963 CASH FLOWS FROM FINANCING ACTIVITIES First Mortgage Bond Issues 99,000 -- Maturities, Redemptions and Sinking Funds (199,183) (51,933) Nuclear Fuel Lease Obligations (29,522) (42,040) Dividends Paid (14,155) (15,596) Premiums, Discounts and Expenses (5,311) (212) -------- -------- Net Cash from Financing Activities (149,171) (109,781) CASH FLOWS FROM INVESTING ACTIVITIES Cash Applied to Construction (25,152) (24,794) Interest Capitalized as Allowance for Borrowed Funds Used During Construction (346) (332) Loans to Affiliates -- (19,200) Contributions to Nuclear Plant Decommissioning Trusts (5,386) (3,244) Other Cash Applied (5,421) (2,301) -------- -------- Net Cash from Investing Activities (36,305) (49,871) -------- -------- NET CHANGE IN CASH AND TEMPORARY CASH INVESTMENTS 14,022 (4,689) CASH AND TEMPORARY CASH INVESTMENTS AT BEGINNING OF PERIOD 87,800 82,042 -------- -------- CASH AND TEMPORARY CASH INVESTMENTS AT END OF PERIOD $101,822 $77,353 ======== ======== Other Payment Information: Interest (net of amounts capitalized) $69,000 $69,000 Federal Income Taxes 17,500 5,700 The accompanying notes as they relate to Toledo Edison are an integral part of this statement.
23 THE TOLEDO EDISON COMPANY MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Capital Resources and Liquidity Reference is made to "Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in Item 7 of the 1994 Form 10-K and in the First and Second Quarter 1995 Form 10-Qs. The information under "Capital Resources and Liquidity" remains unchanged with the following exceptions: During the third quarter of 1995, Toledo Edison completed financings as discussed in Note 4. Within the next few months, Toledo Edison plans to complete the sale of substantially all of its retail customer accounts receivable and unbilled revenues in connection with asset-backed securitization agreements which will provide for the periodic sale, assignment and repurchase of such accounts. The net proceeds from the sale of the accounts receivable are expected to be in the range of $40 million to $50 million. Toledo Edison will use the net proceeds for general corporate purposes. Additional first mortgage bonds may be issued by Toledo Edison under its mortgage on the basis of property additions, cash or refundable first mortgage bonds. If the applicable interest coverage test is met, Toledo Edison may issue first mortgage bonds on the basis of property additions and, under certain circumstances, refundable bonds. At September 30, 1995, Toledo Edison would have been permitted to issue approximately $283 million of additional first mortgage bonds. Under its articles of incorporation, Toledo Edison cannot issue preferred stock unless certain earnings coverage requirements are met. At September 30, 1995, Toledo Edison would have been permitted to issue approximately $87 million of additional preferred stock at an assumed dividend rate of 12%. Results of Operations Factors contributing to the 8.1% and 1.0% increases in 1995 operating revenues from 1994 for the third quarter and nine months, respectively, are shown as follows: 24
Changes for Period Ended September 30, 1995 Three Nine Factors Months Months (millions) Kilowatt-hour Sales Volume and Mix $22.1 $ 24.1 Wholesale Revenues 0.9 (7.1) Fuel Cost Recovery Revenues (4.6) (10.0) Miscellaneous Revenues - (0.2) Total $18.4 $ 6.8
Percentage changes between 1995 and 1994 billed electric kilowatt-hour sales are summarized as follows:
Changes for Period Ended September 30, 1995 Three Nine Customer Categories Months Months Residential 20.8% 4.4% Commercial 7.6 1.7 Industrial 1.1 2.2 Other 16.0 1.5 Total 9.7 2.4
Third quarter 1995 total kilowatt-hour sales increased because of much hotter summer weather than that in 1994. The hot summer weather in 1995 boosted residential, commercial and wholesale sales. Weather-normalized residential sales increased 1.1% for the 1995 period, while weather-normalized commercial sales decreased 4.4%. Wholesale sales (included in the "Other" category) increased 18%. Industrial sales increased primarily because increased sales to petroleum refineries and the broad-based, smaller industrial customer group entirely offset lower sales to large automotive manufacturers. Total kilowatt-hour sales increased for the nine-month period in 1995 primarily because of the hotter summer weather in 1995. The hot summer weather in 1995 resulted in higher residential, commercial and wholesale sales. Weather-normalized residential sales increased 0.8% for the 1995 nine-month period, while weather-normalized commercial sales decreased 1.4%. Industrial sales increased on the strength of increased sales to large glass manufacturers, petroleum refineries and the broad-based, smaller industrial customer group. The decreases in 1995 fuel cost recovery revenues included in customer bills resulted from decreases in the fuel cost recovery factors used in 1995 to calculate these revenues compared to those used in 1994. The decreases in the weighted averages of the fuel cost recovery factors for 1995 were 4.4% and 7.5% for the third quarter and nine months, respectively. 25 Third quarter operating expenses in 1995 increased 7.4% from the 1994 amount. Increased other operation and maintenance expenses resulted from higher power production expenses related to increased generation and third quarter 1995 charges for an ongoing inventory reduction program and the cancellation of certain capital projects. Federal income taxes increased as a result of higher pretax operating income. Fuel and purchased power expenses increased because of higher fuel expense. The increased fuel expense related to increased generation was partially offset by less amortization of previously deferred fuel costs than the amount amortized in 1994. Third quarter depreciation and amortization expenses in 1995 decreased from the 1994 amount because the 1994 third quarter amount included the true-up adjustments for nuclear plant decommissioning expense accruals for the first six months of 1994. This incremental expense was recorded in September 1994 when the cost estimates were revised. Nine-month operating expenses in 1995 decreased 0.3% from the 1994 amount. Fuel and purchased power expenses decreased because of less fuel expense and lower purchased power requirements, the latter resulting from the increased availability of the nuclear generating units in the 1995 period. The lower fuel expense resulted from less amortization of previously deferred fuel costs than the amount amortized in 1994. Federal income taxes increased as a result of higher pretax operating income. Outlook--Rate Matters Toledo Edison continues to take action to increase revenues through the enhanced marketing plan and to control costs. The full impact of these efforts will take time. Also, as discussed in Note 5 in the First Quarter 1995 Form 10-Q, Toledo Edison filed a request with The Public Utilities Commission of Ohio (PUCO) in April 1995 for a rate increase to be effective in 1996. As part of the Rate Stabilization Program, during the 1992-1995 period Toledo Edison is allowed to defer and subsequently recover certain costs not currently recovered in rates and to accelerate the amortization of certain benefits. The Rate Stabilization Program was approved by the PUCO for Toledo Edison in 1992. These cost deferrals and accelerated amortizations totaled $15.6 million and $46.2 million for the 1995 third quarter and nine-month period, respectively. These regulatory accounting deferrals and amortizations will end in the fourth quarter of 1995. On November 3, 1995, the PUCO's staff (Staff) issued its report (Staff Report) relating to Toledo Edison's rate increase request. In the Staff Report, the Staff recommended that the PUCO grant Toledo Edison an annual increase of $35.2 million; however, the Staff recommended that rate relief be conditioned upon Toledo Edison's acceptance of a PUCO recommendation that Toledo Edison "commit to a significant revaluation of its asset base over some finite period of time." The recommended conditional rate increase represents the full amount requested by Toledo Edison. Toledo Edison is evaluating the Staff Report and will have an opportunity to challenge recommendations with which it disagrees during the hearing phase of the rate case expected in December 1995. A PUCO decision is expected in the first quarter of 1996. For additional information, see "Part II, Item 5. Other Information -- 1. 1995 Rate Requests" in this Quarterly Report on Form 10-Q. 26 PART II. OTHER INFORMATION ITEM 5. OTHER INFORMATION 1. 1995 Rate Requests For background relating to this topic see "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations -- Outlook -- Regulatory Accounting" and "Item 1. Business -- Electric Rates -- 1995 Rate Requests" in the Companies' Annual Report on Form 10-K for the year ended December 31, 1994 ("1994 Form 10-K") and Note 5 to the Financial Statements contained in the Companies' Quarterly Report on Form 10-Q for the quarter ended March 31, 1995. On November 3, 1995, the staff of The Public Utilities Commission of Ohio ("PUCO") issued its report ("Staff Report") relating to the requests for rate increases filed by the Operating Companies in March 1995. In the Staff Report, the PUCO staff ("Staff") recommended that the PUCO grant Cleveland Electric an annual increase of $83.9 million and that the PUCO grant Toledo Edison an annual increase of $35.2 million; however, the Staff recommended that rate relief be conditioned upon the Operating Companies' acceptance of a PUCO recommendation that the Operating Companies "commit to a significant revaluation of their asset bases over some finite period of time." The recommended conditional rate increases represent the full amounts requested by the Operating Companies. The Staff recommended a range for return on equity of 12.75% to 13.68% versus the 14.23% requested by each of the Operating Companies. The Staff also recommended an overall rate of return of 10.15% to 10.41% versus 11.09% as requested by each Operating Company. The Staff made no recommendation with respect to Centerior Energy's dividend policy. A consultant for the PUCO recommended that the Centerior Energy Board of Directors continually re-evaluate the appropriateness of its dividend policy in light of the Companies' Strategic Plan ("Plan") and Centerior Energy's financial condition. As previously disclosed, dividend action is determined by the Centerior Energy Board of Directors on a quarter-to-quarter basis after the evaluation of a number of factors including financial results, potential earning capacity and cash flow. The Staff concluded that the Companies' operating revenues as a ratio to net plant, total assets and fixed assets indicate that improved performance in these ratios "will require either a significant increase in revenues or a significant revaluation of assets." The Staff Report does not specify the amount of such reduction or the period of time over which such reduction should occur nor does it provide specific incremental revenues for such reduction. Any such reduction of asset base, would, absent any other factors, result in a corresponding reduction in earnings. If the PUCO were to adopt the Staff's recommendation of conditioning the rate increase on a commitment by the Operating Companies to significantly revalue their asset base, it would be a change in the form of ratemaking traditionally followed by the PUCO. The Companies would evaluate how such a change would affect the applicability of Statement of Financial Accounting Standards ("SFAS" ) No. 71, "Accounting for the Effects of Certain Types of Regulation", to all or a portion of their operations and whether there exists an impairment of its plant costs or regulatory assets under SFAS No. 121, "Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of." Under SFAS No. 121, a disallowance of recovery of a regulatory asset would result in an immediate write-off of such asset. Additionally, a PUCO order that does not provide for full recovery of plant investment and the related operating costs could result in a write-off in the amount of plant impaired. The Companies believe that the recommendation contained in the Staff Report if ordered by the PUCO would not result in any such write-offs. A different conclusion could result depending on the provisions of the PUCO order. 27 The Staff Report is an interim step in the rate-making process. The PUCO is not bound by the recommendations of the Staff. The Companies are evaluating the Staff Report and will have an opportunity to challenge recommendations with which they disagree during the hearing phase of the rate cases expected to begin in December 1995. A decision by the PUCO is expected in the first quarter of 1996. 2. Medical Center Company For background relating to this topic, see "Item 1. Business--Operations--Competitive Conditions--Cleveland Electric" in the 1994 Form 10-K and "Item 5. Other Information--5. Medical Center Company" in the Companies' Quarterly Report on Form 10-Q for the quarter ended June 30, 1995. On October 5, 1995, the PUCO denied Cleveland Electric's request for a rehearing on its complaint against American Electric Power Company ("AEP") and Medical Center Company ("Medco") concerning a proposed power contract between Medco and Cleveland Public Power ("CPP") and an alleged agreement between Medco and AEP. Cleveland Electric plans to appeal this decision to the Ohio Supreme Court. On November 2, 1995, Cleveland Electric filed with the Federal Energy Regulatory Commission a petition for a declaratory order that Cleveland Electric is not required to provide transmission service from an operating subsidiary of AEP to CPP to serve Medco. Cleveland Electric contends, among other things, that this transaction is in reality a direct purchase by Medco from AEP in violation of the Federal Power Act. 3. Garfield Heights For background relating to this topic, see "Item 1. Business--Operations--Competitive Conditions--Cleveland Electric" in the 1994 Form 10-K and "Item 5. Other Information--1. Garfield Heights" in the Companies' Quarterly Report on Form 10-Q for the quarter ended June 30, 1995. On August 24, 1995, the PUCO denied requests for rehearing concerning certain provisions of the PUCO's ruling that a rate reduction in the City of Garfield Heights was not warranted. Each party has subsequently filed Notices of Appeal concerning this case with the Ohio Supreme Court. 4. Management Changes For background relating to this topic, see "Item 10. Directors and Executive Officers of the Registrants" in the 1994 Form 10-K. On October 24, 1995, the Board of Directors of Centerior Energy elected the following officers to new positions effective October 30, 1995: Officer New Title Former Title ------- --------- ------------ Gary R. Leidich Senior Vice President Vice President Terrence G. Linnert Senior Vice President, Vice President Chief Financial Officer and General Counsel On October 24, 1995, the Board of Directors of Centerior Service Company ("Service Company") elected the following officers to new positions effective October 30, 1995: Officer New Title Former Title ------- --------- ------------ Murray R. Edelman Executive Vice President Executive Vice President-Transmission, President-Operations 28 Services and Business & Engineering Enterprises Groups Fred J. Lange, Jr. Senior Vice President Senior Vice President- President-Centerior Fossil & Transmission Electric Company and Distribution Operations Gary R. Leidich Senior Vice President Vice President- President-Power Generation Finance & Group Administration Terrence G. Linnert Senior Vice President- Vice President- Corporate Administration Legal & Governmental Group Affairs and Chief Financial Officer General Counsel General Counsel Officer New Title Former Title ------- --------- ------------ Jacquita K. Hauserman Vice President- Vice President- Business Services Customer Support David L. Monseau Vice President- Vice President- Distribution Services Transmission & Distribution Operations On October 24, 1995, the Board of Directors of the Service Company also elected the following officer effective October 30, 1995: Officer Title ------- --------- Stanley F. Szwed Vice President-Engineering & Planning Mr. Szwed's business experience over the past five years included various positions with the Service Company. He was Manager-Resource Planning from May 1989 to August 1991; Director-System Planning from August 1991 to July 1993; and Director-System Planning and Operations from July 1993 through October 1995. On October 30, 1995, the Board of Directors of Cleveland Electric elected the following officers to new positions effective October 30, 1995: Officer New Title Former Title ------- --------- ------------ Gary R. Leidich Vice President Vice President & Chief Financial Officer Terrence G. Linnert Vice President and Vice President Chief Financial Officer On October 30, 1995, the Board of Directors of Cleveland Electric also elected the following officers effective October 30, 1995: Officer Title ------- ----- David W. Whitehead Regional Vice President-Central Jack A. Kline Regional Vice President-Eastern 29 Mr. Whitehead's business experience over the past five years included various positions with the Service Company. He was General Counsel-Cleveland Electric from October 1989 to September 1990; General Counsel-Cleveland from September 1990 to July 1993; and Director- Governmental Affairs from July 1993 through October 1995. Mr. Kline's business experience over the past five years included various positions with the Service Company. He was General Manager-Cleveland East Operations from May 1990 to July 1993; Director-Cleveland Industrial Marketing from July 1993 to October 1993; Director-Cleveland Marketing East from October 1993 to November 1994; and Director-Eastern Sales Region from November 1994 through October 1995. On October 30, 1995, the Board of Directors of Toledo Edison elected the following officers to new positions effective October 30, 1995: Officer New Title Former Title ------- --------- ------------ Gary R. Leidich Vice President Vice President & Chief Financial Officer Terrence G. Linnert Vice President and Vice President Chief Financial Officer On October 30, 1995, the Board of Directors of Toledo Edison also elected the following officer effective October 30, 1995: Officer Title ------- ----- John E. Paganie Regional Vice President-West Mr. Paganie's business experience over the past five years included various positions with the Service Company. He was Director-Union Relations from May 1990 to August 1991; General Manager-Cleveland West Operations from August 1991 to July 1993; and Director-Human Resources from July 1993 through October 1995. 5. Duquesne Light Company On October 18, 1995, Cleveland Electric filed a Demand for Arbitration in connection with allegations made by Duquesne Light Company ("Duquesne") that certain management practices of Cleveland Electric in its operation of Eastlake Unit 5 ("Unit 5") have been detrimental to Duquesne's partial ownership interest in Unit 5. On October 24, 1995, Cleveland Electric filed a complaint for injunctive and declaratory relief against Duquesne in Lake County (Ohio) Common Pleas Court seeking a court order prohibiting Duquesne from taking action to partition or sell its ownership interest in Unit 5. On October 27, 1995, Duquesne filed a complaint in the United States District Court in Cleveland seeking to have the Lake County action removed to federal court. 6. Chase Brass On October 17, 1995, Chase Brass & Copper Co., Inc. ("Chase Brass") terminated its service with Toledo Edison and began to receive its electric service from a consortium of four municipal electric systems and American Municipal Power-Ohio, Inc. ("AMP-Ohio"), a non-profit wholesale power provider. Service is being provided over a transmission line owned by AMP-Ohio. Although the Ohio Constitution allows municipal electric systems to sell and deliver limited amounts of power outside their municipal boundaries, Toledo Edison has filed two lawsuits in Williams County (Ohio) Common Pleas Court against the four municipalities and AMP-Ohio contending, in part, that this arrangement violates the legal limits of such sales and that AMP-Ohio's system design for this transaction raises certain safety issues. North Western Electric Cooperative, whose certified territory is crossed by AMP-Ohio's transmission line, has also filed suit to challenge this transaction. The loss of Chase Brass as a customer would reduce Centerior Energy's and 30 Toledo Edison's annual net income by about $1,500,000 based on 1994 sales levels. In addition, Chase Brass and other surrounding businesses and residences in Jefferson Township continue to seek incorporation as a municipality to be named the Village of Holiday City. The municipality would be able to bargain with other utilities for electric power. The other businesses in the proposed municipality terminated their service with Toledo Edison earlier and are receiving electric service from the Village of Montpelier, one of the consortium now supplying Chase Brass. 7. Toledo Municipalization Study For background relating to this topic, see "Item 1. Business--Operations--Competitive Conditions--Toledo Edison" in the 1994 Form 10-K. In response to a petition drive, on October 3, 1995, the Toledo City Council appropriated funds to complete a consultant's study on whether to create a municipal electric utility. This study is expected to be completed in 1996. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a. Exhibits -------- See Exhibit Index following. b. Reports on Form 8-K ------------------- During the quarter ended September 30, 1995, Centerior Energy, Cleveland Electric and Toledo Edison did not file any Current Reports on Form 8-K. Signatures ---------- Pursuant to the requirements of the Securities Exchange Act of 1934, each registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. The person signing this report on behalf of each such registrant is also signing in his capacity as each registrant's Chief Accounting Officer. CENTERIOR ENERGY CORPORATION ---------------------------- (Registrant) THE CLEVELAND ELECTRIC ---------------------- ILLUMINATING COMPANY -------------------- (Registrant) THE TOLEDO EDISON COMPANY ------------------------- (Registrant) 31 By: E. LYLE PEPIN -------------------------------------- E. Lyle Pepin, Controller and Chief Accounting Officer of each Registrant Date: September 13, 1995 EXHIBIT INDEX ------------- The following exhibits are filed or, in the case of Financial Data Schedules, submitted herewith: CENTERIOR ENERGY EXHIBIT ------------------------
Exhibit Number Description - -------------- ----------- 27(a) Financial Data Schedule for the period ended September 30, 1995. CLEVELAND ELECTRIC EXHIBITS --------------------------- Exhibit Number Description - -------------- ----------- 4(a) Sixty-Ninth Supplemental Indenture dated May 1, 1995 to Cleveland Electric's Mortgage and Deed of Trust ("CE Mortgage"), creating and securing First Mortgage Bonds, 7-5/8% Series due 2025 (including therein the form of the Bonds of such Series).
32 4(b) Seventieth Supplemental Indenture dated May 2, 1995 to the CE Mortgage, creating and securing First Mortgage Bonds, 9-1/2% Series due 2005-B (including therein the form of the Bonds of such Series). 4(c) Seventy-First Supplemental Indenture dated June 1, 1995 to the CE Mortgage, creating and securing First Mortgage Bonds, Collateral Series A and First Mortgage Bonds Collateral Series B (including therein the forms of the Bonds of such Series). 27(b) Financial Data Schedule for the period ended September 30, 1995. TOLEDO EDISON EXHIBITS ---------------------- Exhibit Number Description - -------------- ----------- 4(d) Forty-second Supplemental Indenture dated as of May 1, 1995 to Toledo Edison's Indenture of Mortgage and Deed of Trust ("TE Mortgage"), creating and securing First Mortgage Bonds, 7-5/8% Series due 2020 (including therein the form of the Bonds of such Series). 4(e) Forty-third Supplemental Indenture dated as of June 1, 1995 to the TE Mortgage, creating and securing First Mortgage Bonds, Collateral Series C and First Mortgage Bonds, Collateral Series D (including therein the forms of the Bonds of such Series). TOLEDO EDISON EXHIBITS (CONT.D) ------------------------------- Exhibit Number Description - -------------- ----------- 4(f) Forty-fourth Supplemental Indenture dated as of July 14, 1995 to the TE Mortgage, creating and securing First Mortgage Bonds, 7-3/4% Series due 2020-A (including therein the form of Bonds of such Series). 4(g) Forty-fifth Supplemental Indenture dated as of July 15, 1995 to the TE Mortgage, creating and securing First Mortgage Bonds, 7-3/4% Series due 2020-B (including therein the form of Bonds of such Series). 27(c) Financial Data Schedule for the period ended September 30, 1995.
EX-27.A 2 EXHIBIT 27.A
UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE RELATED FORM 10-Q FINANCIAL STATEMENTS FOR CENTERIOR ENERGY CORPORATION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 0000774197 CENTERIOR ENERGY CORPORATION 1,000 US DOLLARS 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 1 PER-BOOK 6,852,923 417,884 854,204 2,441,719 0 10,566,730 2,319,688 0 (365,256) 1,954,432 220,440 450,871 3,791,754 0 0 0 181,486 41,179 156,917 91,642 3,678,009 10,566,730 1,934,105 114,769 1,348,247 1,463,016 471,089 35,398 506,487 269,294 191,080 0 0 118,425 305,163 470,865 1.29 0
EX-4.A 3 EXHIBIT 4.A 1 Exhibit 4(a) [CONFORMED] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE CLEVELAND ELECTRIC ILLUMINATING COMPANY TO THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) (successor to Morgan Guaranty Trust Company of New York, formerly Guaranty Trust Company of New York) As Trustee under The Cleveland Electric Illuminating Company's Mortgage and Deed of Trust, Dated July 1, 1940 ------------------------ SIXTY-NINTH SUPPLEMENTAL INDENTURE DATED MAY 1, 1995 FIRST MORTGAGE BONDS, 7 5/8% SERIES DUE 2025 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 i THE CLEVELAND ELECTRIC ILLUMINATING COMPANY Sixty-Ninth Supplemental Indenture Dated May 1, 1995 TABLE OF CONTENTS*
PAGE -------- PARTIES.......................................................... 1 RECITALS: Indenture and Supplemental Indentures.......................... 1 First Mortgage Bonds outstanding............................... 2 Authorization by Indenture of issue of additional Bonds........ 2 Bonds of this Series........................................... 2 Purpose of Sixty-Ninth Supplemental Indenture.................. 2 Authorization of Sixty-Ninth Supplemental Indenture............ 3 Compliance with conditions to making of Sixty-Ninth Supplemental Indenture...................................... 3 ARTICLE I -- CONFIRMATION OF 1940 MORTGAGE AND SUPPLEMENTAL INDENTURES..................................................... 3 ARTICLE II -- CREATION, PROVISIONS, REDEMPTION, PRINCIPAL AMOUNT AND FORM OF BONDS OF THIS SERIES............................... 4 Section 1 -- Creation and designation of Bonds and compliance with Indenture.................................. 4 Section 2 -- Date of Bonds, maturity date, interest rate, accrual date, payment dates, Record Date and place of payments................................................... 4 Section 3 -- Principal amount of Bonds...................... 5 Section 4 -- Registration and denomination of Bonds......... 5 Section 5 -- Transfer and exchange of Bonds................. 5 Section 6 -- Redemption of Bonds............................ 6 Section 7 -- Redemption of Bonds pursuant to Section 4.01(a) of the Authority Trust Indenture........................... 6 Section 8 -- Redemption of Bonds pursuant to Section 4.01(b) of the Authority Trust Indenture........................... 7 Section 9 -- Redemption of Bonds pursuant to Section 4.01(c) of the Authority Trust Indenture........................... 7 Section 10 -- Redemption of Bonds in an "Event of Default" under the Authority Trust Indenture........................ 8
- --------------- *The Table of Contents, the page headings and the recording data are not part of the Sixty-Ninth Supplemental Indenture as executed. 3 ii
PAGE -------- Section 11 -- Notice of redemption under Sections 7 through 10 of Article II of this Supplemental Indenture............ 8 Section 12 -- Bonds deemed to be paid in full upon surrender of Authority Bonds for cancellation under the Authority Trust Indenture............................................ 9 Section 13 -- Payment on the Authority Bonds deemed to be payment of corresponding obligation on Bonds............... 9 Section 14 -- Surrender of Bonds in the event of payment in full or partial payment thereof and issuance of new Bonds for the unpaid balance..................................... 10 Section 15 -- Form of Fully Registered Bond of this Series..................................................... 10 Form of Trustee's Certificate of Authentica- tion........................................ 17 Form of Schedule of Payments.................. 18 ARTICLE III -- THE TRUSTEE....................................... 19 Section 1 -- Acceptance by Trustee.......................... 19 Section 2 -- Responsibility of Trustee...................... 19 Section 3 -- Reliance by Trustee upon certain demands, certificates and opinions.................................. 19 Section 4 -- Records kept and indemnity given by agency of the Company................................................ 19 Section 5 -- Certain advices to the Company................. 20 ARTICLE IV -- MISCELLANEOUS PROVISIONS........................... 20 EXECUTION........................................................ 20 COMPANY'S ACKNOWLEDGMENT......................................... S-1 TRUSTEE'S ACKNOWLEDGMENT......................................... S-2 RECORDING AND FILING DATA........................................ R-1
4 SIXTY-NINTH SUPPLEMENTAL INDENTURE, dated May 1, 1995, made by and between THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, a corporation organized and existing under the laws of the State of Ohio (the "Company"), and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) (successor to MORGAN GUARANTY TRUST COMPANY OF NEW YORK, formerly GUARANTY TRUST COMPANY OF NEW YORK), a national banking association existing under the laws of the United States of America, with its head office at 1 Chase Manhattan Plaza, The City of New York (the "Trustee"), as Trustee under the Mortgage and Deed of Trust dated July 1, 1940, hereinafter mentioned: RECITALS In order to secure First Mortgage Bonds of the Company ("Bonds"), the Company has heretofore executed and delivered to the Trustee the Mortgage and Deed of Trust dated July 1, 1940 (the "1940 Mortgage") and sixty-eight Supplemental Indentures thereto dated, respectively, July 1, 1940, August 18, 1944, December 1, 1947, September 1, 1950, June 1, 1951, May 1, 1954, March 1, 1958, April 1, 1959, December 20, 1967, January 15, 1969, November 1, 1969, June 1, 1970, November 15, 1970, May 1, 1974, April 15, 1975, April 16, 1975, May 28, 1975, February 1, 1976, November 23, 1976, July 26, 1977, September 27, 1977, May 1, 1978, September 1, 1979, April 1, 1980, April 15, 1980, May 28, 1980, June 9, 1980, December 1, 1980, July 28, 1981, August 1, 1981, March 1, 1982, July 15, 1982, September 1, 1982, November 1, 1982, November 15, 1982, May 24, 1983, May 1, 1984, May 23, 1984, June 27, 1984, September 4, 1984, November 14, 1984, November 15, 1984, April 15, 1985, May 28, 1985, August 1, 1985, September 1, 1985, November 1, 1985, April 15, 1986, May 14, 1986, May 15, 1986, February 25, 1987, October 15, 1987, February 24, 1988, September 15, 1988, May 15, 1989, June 13, 1989, October 15, 1989, January 1, 1990, June 1, 1990, August 1, 1990, May 1, 1991, May 1, 1992, July 31, 1992, January 1, 1993, February 1, 1993, May 20, 1993, June 1, 1993 and September 15, 1994; and The 1940 Mortgage, as supplemented and modified by said Supplemental Indentures and by this Sixty-Ninth Supplemental Indenture, will be hereinafter collectively referred to as the "Indenture" and this Sixty-Ninth Supplemental Indenture will be hereinafter referred to as "this Supplemental Indenture"; and 5 2 Pursuant to the provisions of the Indenture, the Company has issued 110 series of Bonds in the aggregate principal amount of $4,958,152,000, of which 73 series in the aggregate principal amount of $2,260,372,000 are no longer outstanding; and The Indenture provides among other things that the Company, from time to time, in addition to the Bonds authorized to be executed, authenticated and delivered pursuant to other provisions therein, may execute and deliver additional Bonds to the Trustee and the Trustee shall thereupon authenticate and deliver such Bonds to or upon the order of the Company; and The Company has determined to create pursuant to the provisions of the Indenture one new series of Bonds designated as "First Mortgage Bonds, 7 5/8% Series due 2025" (the "Bonds of this Series") with the denominations, rate of interest, date of maturity, redemption provisions and other provisions and agreements in respect thereof as in this Supplemental Indenture set forth; and The Bonds of this Series are to be issued by the Company and delivered to the Authority Trustee (hereinafter defined) to evidence and secure its obligation to pay to the Beaver County Industrial Development Authority (hereinafter called the "Authority") a portion of the Company's share of the purchase price for certain air and water pollution control facilities and sewage and solid waste disposal facilities used in connection with the operation of Beaver Valley Power Station Unit 2, a nuclear powered generating unit located in Shippingport, Pennsylvania (hereinafter called the "Project Facilities"), such portion being in an amount equal to the principal amount of the Authority Bonds (hereinafter defined) issued pursuant to the Beaver Valley Pollution Control Facilities Agreement dated as of April 1, 1974, among the Authority, the Company, The Toledo Edison Company, Duquesne Light Company, Ohio Edison Company and Pennsylvania Power Company; and That portion of the Company's share of the cost of the Project Facilities was originally financed with proceeds from the sale by the Authority of $53,900,000 principal amount of Beaver County Industrial Development Authority Collateralized Pollution Control Revenue Bonds (The Cleveland Electric Illuminating Company Beaver Valley Project) 1984 Series (hereinafter called the "Prior Authority Bonds"). The Prior Authority Bonds are to be refunded from the proceeds of one series of Collateralized Pollution Control Revenue Refunding Bonds, Series 1995 (The Cleveland Electric Illuminating Company Beaver Valley Project) (hereinafter called the "Authority Bonds") to be issued pursuant to a Trust Indenture, dated as of May 1, 1995 6 3 (hereinafter called the "Authority Trust Indenture"), between the Authority and Society National Bank, as trustee, (hereinafter called the "Authority Trustee"), and the Bonds of this Series are to be assigned by the Authority to the Authority Trustee as security for the payment of the principal of and premium, if any, and interest on the Authority Bonds and are to be delivered by the Company on behalf of the Authority directly to, and registered in the name of, the Authority Trustee; and The Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Indenture, and pursuant to appropriate resolutions of the Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee this Supplemental Indenture in the form hereof for the purposes herein provided; and All conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized. NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That The Cleveland Electric Illuminating Company, in consideration of the premises and of the mutual covenants herein contained and of the sum of One Dollar ($1.00) to it duly paid by the Trustee at or before the ensealing and delivery of these presents and for other valuable considerations, the receipt whereof is hereby acknowledged, hereby covenants and agrees to and with the Trustee and its successors in the Trust under the Indenture, for the benefit of those who shall hold the Bonds and coupons, if any, issued and to be issued thereunder and under this Supplemental Indenture as hereinafter provided, as follows: ARTICLE I CONFIRMATION OF 1940 MORTGAGE AND SUPPLEMENTAL INDENTURES The 1940 Mortgage (as modified in Article V of the Supplemental Indenture dated December 1, 1947, Article V of the Supplemental Indenture dated May 1, 1954, Article V of the Supplemental Indenture dated March 1, 1958, Article V of the Supplemental Indenture dated January 15, 1969, Article III of the Supplemental Indenture dated November 23, 1976 and Article III of the Supplemental Indenture dated April 15, 1985) and the Supplemental 7 4 Indentures dated July 1, 1940, August 18, 1944, December 1, 1947, September 1, 1950, June 1, 1951, May 1, 1954, March 1, 1958, April 1, 1959, December 20, 1967, January 15, 1969, November 1, 1969, June 1, 1970, November 15, 1970, May 1, 1974, April 15, 1975, April 16, 1975, May 28, 1975, February 1, 1976, November 23, 1976, July 26, 1977, September 27, 1977, May 1, 1978, September 1, 1979, April 1, 1980, April 15, 1980, May 28, 1980, June 9, 1980, December 1, 1980, July 28, 1981, August 1, 1981, March 1, 1982, July 15, 1982, September 1, 1982, November 1, 1982, November 15, 1982, May 24, 1983, May 1, 1984, May 23, 1984, June 27, 1984, September 4, 1984, November 14, 1984, November 15, 1984, April 15, 1985, May 28, 1985, August 1, 1985, September 1, 1985, November 1, 1985, April 15, 1986, May 14, 1986, May 15, 1986, February 25, 1987, October 15, 1987, February 24, 1988, September 15, 1988, May 15, 1989, June 13, 1989, October 15, 1989, January 1, 1990, June 1, 1990, August 1, 1990, May 1, 1991, May 1, 1992, July 31, 1992, January 1, 1993, February 1, 1993, May 20, 1993, June 1, 1993 and September 15, 1994, respectively, are hereby in all respects confirmed. ARTICLE II CREATION, PROVISIONS, REDEMPTION, PRINCIPAL AMOUNT AND FORM OF BONDS OF THIS SERIES SECTION 1. The Company hereby creates a new series of Bonds to be issued under and secured by the Indenture and to be designated as "First Mortgage Bonds, 7 5/8% Series due 2025" of the Company. The Bonds of this Series shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, all of the terms, conditions and covenants of the Indenture. SECTION 2. The Bonds of this Series shall be dated the date of their authentication, shall mature May 1, 2025, and shall bear interest from the time hereinafter provided at the rate of 7 5/8% per annum payable semiannually on the same dates as interest is payable on the Authority Bonds (each such date herein called an "interest payment date") until the maturity of the Bonds of this Series, or, in the case of any Bonds of this Series duly called for redemption, until the redemption date, or, in the case of any default by the Company in the payment of the principal due on any Bonds of this Series, until the Company's obligation with respect to the payment of the principal shall be discharged as provided in the Indenture. 8 5 Except as hereinafter provided, each Bond of this Series shall bear interest (a) from the interest payment date next preceding the date of such Bond to which interest has been paid, or (b) if the date of such Bond is an interest payment date to which interest has been paid, then from such date, or (c) if no interest has been paid thereon, then from May 1, 1995. Notwithstanding the foregoing, if the date of such Bond is after a Record Date (as hereinafter defined) and before the next following interest payment date, then it shall bear interest from such interest payment date; provided, however, that (i) if the Company shall default in the payment of the interest due on such interest payment date, then such Bond shall bear interest from the interest payment date next preceding the date of such Bond to which interest has been paid, or (ii) if no interest has been paid thereon, then it shall bear interest from May 1, 1995. The interest payable on any interest payment date shall be paid to the respective persons in whose names the Bonds of this Series shall be registered at the close of business on the Record Date next preceding such interest payment date, notwithstanding the cancellation of any such Bond upon any transfer or exchange thereof subsequent to such Record Date and prior to such interest payment date; provided, however, that, if and to the extent the Company shall default in the payment of the interest due on such interest payment date, such defaulted interest shall be paid to the respective persons in whose names such outstanding Bonds of this Series are registered at the close of business on a date (the "Subsequent Record Date") not less than ten days nor more than 15 days next preceding the date of payment of such defaulted interest, such Subsequent Record Date to be established by the Company by notice given by mail by or on behalf of the Company to the registered owners of Bonds of this Series not less than 10 days next preceding such Subsequent Record Date. The term "Record Date" shall mean, with respect to any regular interest payment date of any Bond of this Series, the date which would be the "Regular Record Date", as defined in the Authority Trust Indenture, applicable to such regular interest payment date, if it were an "Interest Payment Date", as defined in the Authority Trust Indenture. The Bonds of this Series shall be payable as to principal (and premium, if any) and interest in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts and shall be payable (as well the interest as the principal thereof and the premium thereon, if any) at the agency of the Company in the City of 9 6 Cleveland, State of Ohio, or, at the option of the Company, at the agency of the Company in The City of New York. Unless the context indicates a different meaning, any reference in this Article II to "agency of the Company" means either the agency of the Company in the City of Cleveland, State of Ohio or the agency of the Company in The City of New York. SECTION 3. The principal amount of Bonds of this Series which may be authenticated and delivered hereunder shall not exceed $53,900,000, except as otherwise provided in the Indenture. SECTION 4. The Bonds of this Series shall be issued as fully registered Bonds only, without coupons, in the denominations of $100,000 and any integral multiple thereof. SECTION 5. In the manner and subject to the limitations provided in the Indenture, Bonds of this Series may be transferred or may be exchanged for a like aggregate principal amount of Bonds of this Series of other authorized denominations, in either case without charge, except for any tax or taxes or other governmental charges incident to such transfer or exchange, at the agency of the Company in The City of New York. In the event less than all of the Bonds of this Series at the time outstanding are called for redemption, the Company shall not be required (a) to register any transfer or make any exchange of any such Bond for a period of 15 days before the mailing of the notice of redemption of any such Bond, (b) to register any transfer or make any exchange of any such Bond so called for redemption in its entirety, or (c) to register any transfer or make any exchange of any portion of any such Bond so called for redemption. Except as otherwise provided in Section 2 of this Article II with respect to the payment of interest, the Company, the agencies of the Company and the Trustee may deem and treat the person in whose name a Bond of this Series is registered as the absolute owner thereof for the purpose of receiving any payment and for all other purposes. SECTION 6. The Bonds of this Series shall be redeemable only to the extent provided in this Article II, subject to the provisions contained in Article V of the Indenture and the form of Bond of this Series. SECTION 7. The Bonds of this Series shall be subject to redemption by the Company prior to maturity in whole at any time or in part from time to time at a redemption price of 100% of the principal amount to be redeemed, but in each instance only upon receipt by the Trustee of an officers' certificate 10 7 to the effect (a) that the Authority, at the direction of the Company, or the Company, on behalf of the Authority, has given notice to the Authority Trustee that the Company is exercising its option to direct the redemption of all or a part (specifying the principal amount) of the Authority Bonds as provided in Section 4.01(a) of the Authority Trust Indenture and (b) that an equivalent principal amount of Bonds of this Series shall be concurrently called for redemption. Such officers' certificate shall specify the principal amount of the Bonds of this Series to be redeemed and the accrued and unpaid interest to the redemption date, shall have attached to it a copy of said notice to the Authority Trustee and said direction of the Company and shall specify the redemption date of such Bonds of this Series (which redemption date shall be not less than forty-five (45) days from the date of the Trustee's receipt of such certificate and shall be the same date as the redemption date of the Authority Bonds being concurrently redeemed which is specified in said attached notice). The redemption of the Bonds of this Series shall be made upon the notice and in the manner provided in this Article II, subject to the provisions of the Indenture. SECTION 8. The Bonds of this Series shall be redeemed by the Company prior to maturity in whole at any time or in part from time to time upon a final determination by any federal judicial or administrative authority that interest on the Authority Bonds is includable for federal income tax purposes in the gross income of the holders of the Authority Bonds (other than because a holder is a "substantial user" of the Project Facilities or a "related person" thereof as those terms are used in Section 147(a) of the Internal Revenue Code of 1986, as amended) at a redemption price of 100% of the principal amount to be redeemed plus accrued and unpaid interest to the redemption date, but in each instance only upon receipt by the Trustee of an officers' certificate to the effect (a) that the Authority, at the direction of the Company, or the Company, on behalf of the Authority, has given notice to the Authority Trustee that it is required to redeem all or a part (specifying the principal amount) of the Authority Bonds as provided in Section 4.01(b) of the Authority Trust Indenture and (b) that an equivalent principal amount of Bonds of this Series shall be concurrently called for redemption. Such officers' certificate shall specify the principal amount of the Bonds of this Series to be redeemed and the redemption price thereof and accrued and unpaid interest to the redemption date, shall have attached to it a copy of said notice to the Authority Trustee and said direction of the Company and shall specify the redemption date of such Bonds of this Series (which redemption date shall be not less than forty-five (45) days from the date of the Trustee's receipt of such 11 8 certificate and shall be the same date as the redemption date of the Authority Bonds being concurrently redeemed which is specified in said attached notice). The redemption of the Bonds of this Series shall be made upon the notice and in the manner provided in this Article II, subject to the provisions of the Indenture. SECTION 9. The Bonds of this Series shall be subject to redemption by the Company prior to maturity in whole at any time or in part from time to time, but in no instance before May 1, 2005, at the same redemption price plus accrued and unpaid interest, if any, as shall be payable on the Authority Bonds to be redeemed concurrently therewith, to the redemption date as follows:
REDEMPTION PRICE (EXPRESSED AS A PERCENTAGE OF THE REDEMPTION PERIODS PRINCIPAL AMOUNT (DATES INCLUSIVE) BEING REDEEMED) - --------------------------------------------- -------------------- May 1, 2005 through April 30, 2006........... 102% May 1, 2006 through April 30, 2007........... 101 May 1, 2007 and thereafter................... 100
but in each instance only upon receipt by the Trustee of an officers' certificate to the effect (a) that the Authority, at the direction of the Company, or the Company, on behalf of the Authority, has given notice to the Authority Trustee that the Company is exercising its option to direct the redemption of all or part (specifying the principal amount) of the Authority Bonds as provided in Section 4.01(c) of the Authority Trust Indenture and (b) that an equivalent principal amount of Bonds of this Series shall be concurrently called for redemption. Such officers' certificate shall specify the principal amount of the Bonds of this Series to be redeemed and the redemption price thereof and accrued and unpaid interest to the redemption date, shall have attached to it a copy of said notice to the Authority Trustee and said direction of the Company and shall specify the redemption date of such Bonds of this Series (which redemption date shall be not less than forty-five (45) days from the date of the Trustee's receipt of such certificate and shall be the same date as the redemption date of the Authority Bonds being concurrently redeemed which is specified in said attached notice). The redemption of the Bonds of this Series shall be made upon the notice and in the manner provided in this Article II, subject to the provisions of the Indenture. SECTION 10. The Bonds of this Series shall be redeemed by the Company in whole at any time prior to maturity at a redemption price of 100% of the 12 9 principal amount to be redeemed, plus accrued and unpaid interest to the redemption date, but only if the Trustee shall receive a written demand from the Authority Trustee for redemption of all Bonds of this Series held by the Authority Trustee stating that an "Event of Default" under the Authority Trust Indenture has occurred and is continuing and that payment of the principal of the Authority Bonds has been accelerated; provided, however, that the Bonds of this Series shall not be redeemed in the event that prior to the date of mailing of notice of such redemption as provided in Section 11 of this Article II (a) the Trustee shall have received a certificate of the Authority Trustee (i) stating that there has been a waiver of such acceleration or (ii) withdrawing said written demand or (b) if an event of default under Section 1 of Article IX of the Indenture shall have occurred and be continuing, there has been a declaration of acceleration of the principal of the Bonds of this Series. The redemption of the Bonds of this Series shall be made on a date selected by the Company not more than forty-five (45) days after receipt of the written demand and shall be made upon the notice and in the manner provided in this Article II, subject to the provisions of the Indenture. SECTION 11. Subject to the provisions of the Indenture, written notice of redemption of Bonds of this Series pursuant to any of Sections 7 through 10, inclusive, of this Article II shall be given by the Trustee by mailing to the registered owner or owners of such Bonds to be redeemed a notice of such redemption, first class postage prepaid, at its last address as it shall appear upon the books of the Company for the registration and transfer of such Bonds. Any notice of redemption pursuant to said Section 7, 8 or 9 shall be mailed at least 30 days and not more than 60 days before the redemption date and any notice of redemption pursuant to said Section 10 shall be mailed not more than 45 days before the redemption date; provided, however, that the registered owner or owners of all Bonds of this Series may consent in writing to a shorter notice period, and such consent, if filed with the Trustee, shall be binding upon the Company and such registered owner or owners and their transferees. In the event of a partial redemption, the Trustee shall select the Bonds of this Series to be redeemed in such manner as the Trustee shall deem appropriate and fair. SECTION 12. In the event any Authority Bonds shall be purchased by the Company and surrendered by the Company to the Authority Trustee for cancellation or shall be otherwise surrendered to the Authority Trustee or other person for cancellation pursuant to the Authority Trust Indenture (except upon exchange for other Authority Bonds), Bonds of this Series equal in principal amount to the Authority Bonds so surrendered shall be deemed to have been 13 10 paid, but only when and to the extent that (a) such payment of such principal amount of such Bonds of this Series shall be noted by an agency of the Company on the Schedule of Payments on such Bonds of this Series and (if such agency is not the Trustee) written notice by such agency of such notation shall have been received by the Trustee or (b) such principal amount of such Bonds of this Series shall have been surrendered to and cancelled by the Trustee as provided in Section 14 of this Article II. SECTION 13. In the event and to the extent the principal of (or premium, if any) or interest on any Authority Bonds shall be paid out of funds held by the Authority Trustee or out of any other funds or shall otherwise be deemed to be paid, an equal amount of principal (or premium, if any) or interest, as the case may be, payable with respect to an aggregate principal amount of Bonds of this Series equal to the aggregate principal amount of such Authority Bonds shall be deemed to have been paid, but, in the case of such payment of principal of such Bonds of this Series, only when and to the extent that (a) such payment of the principal amount thereof shall be noted by an agency of the Company on the Schedule of Payments on such Bonds of this Series and (if such agency is not the Trustee) written notice by such agency of such notation shall have been received by the Trustee or (b) such principal amount of Bonds of this Series shall have been surrendered to and cancelled by the Trustee as provided in Section 14 of this Article II. If the Authority Bonds are issued in an aggregate principal amount of less than $53,900,000, an aggregate principal amount of the Bonds of this Series equal to the difference between $53,900,000 and the aggregate principal amount of the Authority Bonds issued (and all related premium and interest, if any) shall be deemed to have been paid. SECTION 14. When payment of any principal amount of a Bond of this Series is made as provided in Section 12 or 13 of this Article II, the registered owner thereof shall surrender such Bond to an agency of the Company for notation and notification or to the Trustee for cancellation as provided in such Section. All Bonds of this Series deemed to have been paid in full as provided in Section 12 or 13 of this Article II shall be surrendered to the Trustee for cancellation and the Trustee shall forthwith cancel the same. In the event that part of a Bond of this Series shall be deemed to have been paid as provided in said Section 12 or 13, the registered owner shall surrender such Bond to the Trustee for cancellation, in which event the Trustee shall cancel such Bond and the Company shall execute and the Trustee shall authenticate and deliver, without charge to the registered owner, Bonds of this Series in such authorized 14 11 denominations as shall be specified by the registered owner in an aggregate principal amount equal to the unpaid balance of the principal amount of such surrendered Bond. SECTION 15. The form of the fully registered Bonds of this Series and of the Trustee's certificate of authentication thereon shall be substantially as follows: [FORM OF FULLY REGISTERED BOND OF THIS SERIES] THE CLEVELAND ELECTRIC ILLUMINATING COMPANY Incorporated under the laws of the State of Ohio FIRST MORTGAGE BOND, 7 5/8% SERIES DUE 2025 Due May 1, 2025 No. $ THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, a corporation organized and existing under the laws of the State of Ohio (hereinafter called the "Company", which term shall include any successor corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay to , or registered assigns, the sum of Dollars or the aggregate unpaid principal amount hereof (as shown on the Schedule of Payments hereon), whichever is less, on May 1, 2025, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay interest on the unpaid principal amount hereof in like coin or currency from the time hereinafter provided at such rate per annum on each interest payment date (hereinafter defined) as shall cause the amount of interest payable on such interest payment date on the Bonds of this Series (hereinafter defined) to equal the amount of interest payable on such interest payment date on the Authority Bonds (hereinafter defined) and payable semiannually on the same dates as interest is payable on said Authority Bonds (each such date herein called an "interest payment date") until the maturity of this Bond, or, if this Bond shall be duly called for redemption, until the redemption date, or, if the Company shall default in the payment of the principal amount of this Bond, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in said Indenture. Except as hereinafter provided, this Bond shall bear interest (a) from the interest payment date next preceding the date of this Bond to which interest has been paid, or (b) if the date of this 15 12 Bond is an interest payment date to which interest has been paid, then from such date, or (c) if no interest has been paid on this Bond, then from May 1, 1995. Notwithstanding the foregoing, if the date of this Bond is after the Record Date (as defined in Section 2 of Article II of the Supplemental Indenture hereinafter defined) which next precedes an interest payment date and before such interest payment date, then it shall bear interest from such interest payment date; provided, however, that (i) if the Company shall default in the payment of the interest due on such interest payment date, then this Bond shall bear interest from the interest payment date next preceding the date of this Bond to which interest has been paid, or (ii) if no interest has been paid on this Bond, then it shall bear interest from May 1, 1995. Subject to certain exceptions provided in said Indenture, the interest payable on any interest payment date shall be paid to the person in whose name this Bond shall be registered at the close of business on the Record Date or, in the case of defaulted interest, on a day preceding the date of payment thereof established by notice to the registered owner of this Bond in the manner provided in said Supplemental Indenture. Principal of (and premium, if any) and interest on this Bond are payable at the agency of the Company in The City of New York, or, at the option of the registered owner, at the agency of the Company in the City of Cleveland, State of Ohio. This Bond is one of the duly authorized First Mortgage Bonds of the Company (herein called the "Bonds"), all issued and to be issued under and equally secured by a Mortgage and Deed of Trust dated July 1, 1940, executed by the Company to Guaranty Trust Company of New York as Trustee, under which The Chase Manhattan Bank (National Association) is successor trustee (herein called the "Trustee"), and all indentures supplemental thereto (said Mortgage as so supplemented herein called the "Indenture") to which reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of the registered owner or owners of the Bonds and of the Trustee in respect thereof and the terms and conditions upon which the Bonds are, and are to be, secured. The Bonds may be issued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as in the Indenture provided. This Bond is one of a series designated as the First Mortgage Bonds, 7 5/8% Series due 2025 (herein called the "Bonds of this Series") limited, except as otherwise provided in the Indenture, in aggregate principal amount to $53,900,000, issued under and secured by the Indenture and described in the Supplemental Indenture dated May 1, 1995, between the Company and the Trustee (herein called the "Supplemental Indenture"). 16 13 The Bonds of this Series have been issued by the Company and delivered to the Authority Trustee (hereinafter defined) to evidence and secure its obligation to pay to the Beaver County Industrial Development Authority (hereinafter called the "Authority") a portion of the Company's share of the purchase price for certain air and water pollution control facilities and sewage and solid waste disposal facilities used in connection with the operation of Beaver Valley Power Station Unit 2, a nuclear powered generating unit located in Shippingport, Pennsylvania (hereinafter called the "Project Facilities"), such portion being in an amount equal to the principal of the Authority Bonds (hereinafter defined) issued pursuant to the Beaver Valley Pollution Control Facilities Agreement dated as of April 1, 1974, among the Authority, the Company, The Toledo Edison Company, Duquesne Light Company, Ohio Edison Company and Pennsylvania Power Company. That portion of the Company's share of the cost of the Project Facilities was originally financed with proceeds from the sale by the Authority of certain bonds, which were refunded from the proceeds of one series of Collateralized Pollution Control Revenue Refunding Bonds, Series 1995 (The Cleveland Electric Illuminating Company Beaver Valley Project) (hereinafter called the "Authority Bonds") issued pursuant to a Trust Indenture, dated as of May 1, 1995 (hereinafter called the "Authority Trust Indenture"), between the Authority and Society National Bank, as trustee, (hereinafter called the "Authority Trustee"). The Bonds of this Series have been assigned by the Authority to the Authority Trustee as security for the payment of the principal of and premium, if any, and interest on the Authority Bonds and have been delivered by the Company on behalf of the Authority directly to, and registered in the name of, the Authority Trustee. In the event any Authority Bonds shall be surrendered to the Authority Trustee or other person for cancellation pursuant to the Authority Trust Indenture (except upon exchange for other Authority Bonds), Bonds of this Series equal in principal amount to such Authority Bonds shall be deemed to have been paid, but only when and to the extent (a) so noted on the Schedule of Payments hereon by one of the agencies of the Company hereinabove specified and (if such agency is not the Trustee) written notice by such agency of such notation has been received by the Trustee or (b) such Bond is surrendered to and cancelled by the Trustee as provided in the next paragraph; and in the event and to the extent the principal of (or premium, if any) or interest on any Authority Bonds shall be paid or deemed to be paid, an equal amount of principal (or premium, if any) or interest, as the case may be, payable with respect to an aggregate principal amount of Bonds of this Series 17 14 equal to the aggregate principal amount of such Authority Bonds shall be deemed to have been paid, but, in the case of such payment of principal, only when and to the extent (i) so noted on the Schedule of Payments hereon by one of the agencies of the Company hereinabove specified and (if such agency is not the Trustee) written notice by such agency of such notation has been received by the Trustee or (ii) such Bond is surrendered to and cancelled by the Trustee as provided in the next paragraph. When any such payment of principal of this Bond is made, such Bond shall be surrendered by the registered owner hereof to an agency of the Company for such notation or to the Trustee for cancellation. If the Authority Bonds are issued in an aggregate principal amount of less than $53,900,000, an aggregate principal amount of the Bonds of this Series equal to the difference between $53,900,000 and the aggregate principal amount of the Authority Bonds issued (and all related premium and interest, if any) shall be deemed to have been paid. In the event that this Bond shall be deemed to have been paid in full, this Bond shall be surrendered to the Trustee for cancellation. In the event that this Bond shall be deemed to have been paid in part, this Bond may, at the option of the registered holder, be surrendered to the Trustee for cancellation, in which event the Trustee shall cancel this Bond and the Company shall execute and the Trustee shall authenticate and deliver Bonds of this Series in authorized denominations in aggregate principal amount equal to the unpaid balance of the principal amount of this Bond. The Bonds of this Series are subject to redemption by the Company prior to maturity in whole at any time or in part from time to time as provided in Section 7 of Article II of the Supplemental Indenture at a redemption price of 100% of the principal amount to be redeemed, plus accrued and unpaid interest to the redemption date. The Bonds of this Series shall be redeemed by the Company prior to maturity in whole at any time or in part from time to time as provided in Section 8 of Article II of the Supplemental Indenture at a redemption price of 100% of the principal amount to be redeemed, plus accrued and unpaid interest to the redemption date, at the earliest practicable date selected by the Authority Trustee after consultation with the Company, but in no event later than 180 days following the Authority Trustee's notification of the Determination of Taxability (as defined in the Authority Trust Indenture). The Bonds of this Series are subject to redemption by the Company prior to maturity in whole at any time or in part from time to time, but in no instance 18 15 before May 1, 2005, as provided in Section 9 of Article II of the Supplemental Indenture at a redemption price, plus accrued and unpaid interest, if any, to the redemption date as follows:
REDEMPTION PRICE (EXPRESSED AS A PERCENTAGE OF THE REDEMPTION PERIODS PRINCIPAL AMOUNT (DATES INCLUSIVE) BEING REDEEMED) - --------------------------------------------- -------------------- May 1, 2005 through April 30, 2006........... 102% May 1, 2006 through April 30, 2007........... 101 May 1, 2007 and thereafter................... 100
The Bonds of this Series shall be redeemed by the Company prior to maturity in whole at any time as provided in Section 10 of Article II of the Supplemental Indenture at a redemption price of 100% of the principal amount to be redeemed, plus accrued and unpaid interest to the redemption date. Any redemption of the Bonds of this Series shall be made after written notice to the registered owner or owners of such Bonds, sent by the Trustee by first class mail, postage prepaid, at least 30 days and not more than 60 days before the redemption date (except in the event of redemption described in the next preceding paragraph in which case such notice shall be mailed not more than 45 days before the redemption date), unless a shorter notice period is consented to in writing by the registered owner or owners of all Bonds of this Series and such consent is filed with the Trustee, and such redemption and notice shall be made in the manner provided in Article II of the Supplemental Indenture, subject to the provisions of the Indenture. In the event of a partial redemption, the Trustee shall select the Bonds of this Series to be redeemed in such manner as the Trustee shall deem appropriate and fair. In the Forty-Third Supplemental Indenture dated April 15, 1985 between the Company and the Trustee, the Company has modified, in certain respects, the redemption provisions in the Indenture effective only with respect to the Bonds of all series established or created in said Forty-Third Supplemental Indenture and all supplemental indentures dated after May 28, 1985. To the extent permitted by and as provided in the Indenture, modifications or alterations of the Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the Company and of the holders of the Bonds and coupons may be made with the consent of the Company by an affirmative vote of not less than 80% in principal amount of the Bonds entitled to vote then outstanding at a meeting of Bondholders called and held as 19 16 provided in the Indenture and, in case one or more but less than all of the series of Bonds then outstanding under the Indenture are so affected, by an affirmative vote of not less than 80% in principal amount of the Bonds of any series entitled to vote then outstanding and affected by such modification or alteration; provided, however, that no such modification or alteration shall be made which will affect the terms of payment of the principal of (or premium, if any) or interest on this Bond. In the Nineteenth Supplemental Indenture dated November 23, 1976 between the Company and the Trustee, the Company has modified the Indenture effective from and after the time when none of the Bonds of any series established prior to the execution of the Nineteenth Supplemental Indenture shall remain outstanding so as to change "80%" in the foregoing sentence to "60%" and to make certain other modifications of the Indenture and has reserved the right to make certain other modifications of the Indenture without any vote, consent or other action by the holders of Bonds of any series established in the Nineteenth Supplemental Indenture or in any subsequent supplemental indenture. If an event of default, as defined in the Indenture, shall occur, the principal of all the Bonds at any such time outstanding under the Indenture may be declared or may become due and payable upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Bonds outstanding. Subject to the limitations provided in the Indenture, this Bond is transferable by the registered owner hereof, in person or by duly authorized attorney, on the books of the Company to be kept for that purpose at the agency of the Company in The City of New York upon surrender and cancellation of this Bond, and upon presentation of a duly executed written instrument of transfer, and thereupon a new fully registered Bond or Bonds of this Series, of the same aggregate principal amount and in authorized denominations will be issued to the transferee or transferees in exchange herefor; and this Bond, with or without other Bonds of this Series, may in like manner be exchanged for one or more new fully registered Bonds of this Series of other authorized denominations but of the same aggregate principal amount; all without charge except for any tax or taxes or other governmental charges incidental to such transfer or exchange and all subject to the terms and conditions set forth in the Indenture. In the event less than all of the Bonds of this Series at the time outstanding are called for redemption, the Company shall not be required (a) to register any transfer or make any exchange of any such Bond for a period of 15 days before 20 17 the mailing of the notice of redemption of any such Bond, (b) to register any transfer or make any exchange of any such Bond so called for redemption in its entirety, or (c) to register any transfer or make any exchange of any portion of any such Bond so called for redemption. Except as otherwise provided herein with respect to the payment of interest, the Company, the agencies of the Company and the Trustee may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving any payment and for all other purposes. No recourse shall be had for the payment of the principal of or the interest or premium, if any, on this Bond, or for any claim based hereon or on the Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or officer, past, present or future, of the Company, or of any predecessor or successor corporation, as such, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution or statute or otherwise, of incorporators, stockholders, directors or officers being released by every owner hereof by the acceptance of this Bond and as part of the consideration for the issue hereof and being likewise released by the terms of the Indenture. This Bond shall not be entitled to any benefit under the Indenture or any indenture supplemental thereto, or become valid or obligatory for any purpose, until the Trustee under the Indenture, or a successor trustee thereto under the Indenture, shall have signed the form of certificate of authentication endorsed hereon. 21 18 IN WITNESS WHEREOF, The Cleveland Electric Illuminating Company has caused this Bond to be signed in its name by its President or a Vice President (whose signature may be manual or a facsimile thereof) and its corporate seal (or a facsimile thereof) to be hereto affixed and attested by its Secretary or an Assistant Secretary (whose signature may be manual or a facsimile thereof). Dated: THE CLEVELAND ELECTRIC ILLUMINATING COMPANY By ...................................................... VICE PRESIDENT Attest: ................................ Secretary [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Bond is one of the Bonds of the series designated and described in the within-mentioned Indenture and Supplemental Indenture. THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), TRUSTEE By ............................................. AUTHORIZED OFFICER 22 19 [FORM OF SCHEDULE OF PAYMENTS] SCHEDULE OF PAYMENTS
AGENCY OF THE UNPAID COMPANY PRINCIPAL PRINCIPAL PREMIUM INTEREST MAKING AUTHORIZED DATE PAYMENT AMOUNT PAYMENT PAYMENT NOTATION OFFICER TITLE - --------- ------- ------- ------- ------- ------- ------- -------
[END OF FORM OF FULLY REGISTERED BOND] 23 20 ARTICLE III THE TRUSTEE SECTION 1. The Trustee hereby accepts the trusts hereby declared and provided upon the terms and conditions in the Indenture set forth and upon the terms and conditions set forth in this Article III. SECTION 2. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XIII of the Indenture shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate. SECTION 3. For purposes of this Supplemental Indenture, (a) the Trustee may conclusively rely and shall be protected in acting upon the written demand from, or certificate of, the Authority Trustee or any officers' certificate or opinion of counsel as to the truth of the statements and the correctness of the opinions expressed therein, without independent investigation or verification thereof, subject to Article XIII of the Indenture and (b) a written demand from, or certificate of, the Authority Trustee shall mean a written demand or certificate executed by the president, any vice president or any trust officer of the Authority Trustee. SECTION 4. The Company shall cause any agency of the Company, other than the Trustee, which it may appoint from time to time to act as such agency in respect of the Bonds of this Series, to execute and deliver to the Trustee an instrument in which such agency shall: (a) Agree to keep and maintain, and furnish to the Trustee from time to time as reasonably requested by the Trustee, appropriate records of all transactions carried out by it as such agency and to furnish the Trustee such other information and reports as the Trustee may reasonably require; (b) Certify that it is eligible for appointment as such agency and agree to notify the Trustee promptly if it shall cease to be so eligible; and (c) Agree to indemnify the Trustee, in a manner satisfactory to the Trustee, against any loss, liability or expense incurred by, and defend any 24 21 claim asserted against, the Trustee by reason of any acts or failures to act as such agency, except for any liability resulting from any action taken by it at the specific direction of the Trustee; provided, however, that the Company, in lieu of causing any such agency to furnish such an instrument, may make such other arrangements with the Trustee in respect of any such agency as shall be satisfactory to the Trustee. SECTION 5. The Trustee shall advise the Company in writing of the receipt of any notification provided for in or any cancellation made pursuant to Section 12, 13 or 14 of Article II of this Supplemental Indenture. ARTICLE IV MISCELLANEOUS PROVISIONS This Supplemental Indenture may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original; but such counterparts shall together constitute but one and the same instrument. EXECUTION IN WITNESS WHEREOF, said The Cleveland Electric Illuminating Company has caused this Supplemental Indenture to be executed on its behalf by its President or one of its Vice Presidents and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by its Secretary or an Assistant Secretary, and said The Chase Manhattan Bank (National Association), in evidence of its acceptance of the trust hereby created, has caused this Supplemental Indenture to be executed on its behalf by one of its Vice Presidents or one of its Trust Officers and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by one of its Assistant Secretaries or Corporate Trust Officers, all as of the day and year first above written. 25 S-1 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, By TERRENCE G. LINNERT Vice President Attest: J. T. PERCIO Secretary Signed, sealed and acknowledged by THE CLEVELAND ELECTRIC ILLUMINATING COMPANY in the presence of PATRICIA BARKEY - ----------------------------------- Patricia A. Barkey SONDRA CLARKE - ----------------------------------- Sondra Clarke As witnesses [SEAL] THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), AS TRUSTEE By VALERIE DUNBAR Second Vice President Attest: BROOKS VON ARX, JR. Corporate Trust Officer Signed, sealed and acknowledged on behalf of The Chase Manhattan Bank (National Association) in the presence of R. J. HALLERAN - ----------------------------------- Ronald J. Halleran L. M. FITZPATRICK - ----------------------------------- L. M. Fitzpatrick As witnesses [SEAL] 26 S-2 STATE OF OHIO ) COUNTY OF CUYAHOGA ) ss: On this 5th day of May, 1995, before me personally appeared TERRENCE G. LINNERT and J. T. PERCIO to me personally known, who being by me severally duly sworn, did say that they are a Vice President and the Secretary, respectively, of The Cleveland Electric Illuminating Company, that the seal affixed to the foregoing instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said corporation. AMY B. MCCABE [SEAL] Notary Public Amy B. McCabe Notary Public, State of Ohio Recorded in Cuyahoga County My Commission expires October 23, 1999 STATE OF NEW YORK ) COUNTY OF NEW YORK ) ss: On this 8th day of May, 1995, before me personally appeared VALERIE DUNBAR and BROOKS VON ARX, JR. to me personally known, who being by me severally duly sworn, did say that they are a Second Vice President and a Corporate Trust Officer, respectively, of The Chase Manhattan Bank (National Association), that the seal affixed to the foregoing instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said corporation. MARGARET M. PRICE [SEAL] Notary Public Margaret M. Price Notary Public, State of New York No. 24-4980599 Qualified in Kings County Commission Expires April 22, 1997 This instrument prepared by Bruce T. Rosenbaum, attorney at law. 27 R-1 This page contains information as to recording and filing which was not set forth in this Supplemental Indenture at the time of execution. This page is not a part of this Supplemental Indenture. RECORDING AND FILING DATA This Supplemental Indenture was filed for record and recorded in the record of mortgages in the offices of the Recorders of the following Counties:
COUNTY VOLUME PAGE FILED FOR RECORD - ------------------------------- --------------- ------------------------- Ohio Ashtabula 81 3025 May 12, 1995 Cuyahoga 95-03573 41 May 12, 1995 Erie 221 206 May 11, 1995 Geauga 1014 1214 May 12, 1995 Lake 1115 717 May 12, 1995 Lorain 1081 20 May 12, 1995 Ottawa 454 38 May 11, 1995 Portage 24 529 May 12, 1995 Stark Instrument No. 95020112 May 12, 1995 Summit 1923 955 May 12, 1995 Trumbull 931 510 May 12, 1995 Pennsylvania Warren 1367 612 May 12, 1995 Beaver 605 61 May 12, 1995
An amendment to a previously filed financing statement and a counterpart of this Supplemental Indenture were filed in the office of the Secretary of the Commonwealth of Pennsylvania on May 12, 1995 under original or amendment file number 13451763, microfilm number 24280159, to comply with the filing requirements of the Pennsylvania enactment of the Uniform Commercial Code. EX-4.B 4 EXHIBIT 4.B 1 Exhibit 4(b) [CONFORMED] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE CLEVELAND ELECTRIC ILLUMINATING COMPANY TO THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) (successor to Morgan Guaranty Trust Company of New York, formerly Guaranty Trust Company of New York) As Trustee under The Cleveland Electric Illuminating Company's Mortgage and Deed of Trust, Dated July 1, 1940 ------------------------ SEVENTIETH SUPPLEMENTAL INDENTURE DATED MAY 2, 1995 FIRST MORTGAGE BONDS, 9 1/2% SERIES DUE 2005-B - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 i THE CLEVELAND ELECTRIC ILLUMINATING COMPANY SEVENTIETH SUPPLEMENTAL INDENTURE DATED MAY 2, 1995 TABLE OF CONTENTS*
PAGE -------- PARTIES.......................................................... 1 RECITALS: Indenture and Supplemental Indentures.......................... 1 First Mortgage Bonds outstanding............................... 1 Authorization by Indenture of issue of additional Bonds........ 2 Bonds of this Series........................................... 2 Authorization of Seventieth Supplemental Indenture............. 2 Compliance with conditions to making of Seventieth Supplemental Indenture...................................... 2 ARTICLE I -- CONFIRMATION OF 1940 MORTGAGE AND SUPPLEMENTAL INDENTURES..................................................... 2 ARTICLE II -- CREATION, PROVISIONS, REDEMPTION, PRINCIPAL AMOUNT AND FORM OF BONDS OF THIS SERIES............................... 3 Section 1 -- Creation and designation of Bonds and compliance with Indenture.................................. 3 Section 2 -- Registered Bonds and denominations............. 3 Section 3 -- Date of Bonds, maturity date, interest rate, accrual date, payment dates, place of payments, Subsequent Record Date and Record Date................................ 3 Section 4 -- Transfer and exchange of Bonds................. 4 Section 5 -- Redemption of Bonds............................ 5 Section 6 -- Notice of redemption........................... 5 Section 7 -- Surrender of Bonds purchased or otherwise acquired................................................... 5 Section 8 -- Principal amount of Bonds which may be authenticated and delivered................................ 5 Section 9 -- Form of Fully Registered Bonds................. 5 Form of Trustee's Certificate of Authentica- tion........................................ 5
- --------------- *The Table of Contents, the page headings and the recording data are not part of the Seventieth Supplemental Indenture as executed. 3 ii
PAGE -------- ARTICLE III -- THE TRUSTEE....................................... 11 Section 1 -- Acceptance by Trustee.......................... 11 Section 2 -- Responsibility of Trustee...................... 11 ARTICLE IV -- MISCELLANEOUS PROVISIONS........................... 11 EXECUTION........................................................ 11 COMPANY'S ACKNOWLEDGMENT......................................... S-1 TRUSTEE'S ACKNOWLEDGMENT......................................... S-2 RECORDING AND FILING DATA........................................ R-1
4 SEVENTIETH SUPPLEMENTAL INDENTURE, dated May 2, 1995, made by and between THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, a corporation organized and existing under the laws of the State of Ohio (the "Company"), and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) (successor to MORGAN GUARANTY TRUST COMPANY OF NEW YORK, formerly GUARANTY TRUST COMPANY OF NEW YORK), a national banking association existing under the laws of the United States of America, with its head office at 1 Chase Manhattan Plaza, The City of New York (the "Trustee"), as Trustee under the Mortgage and Deed of Trust dated July 1, 1940, hereinafter mentioned: RECITALS In order to secure First Mortgage Bonds of the Company ("Bonds"), the Company has heretofore executed and delivered to the Trustee the Mortgage and Deed of Trust dated July 1, 1940 (the "1940 Mortgage") and sixty-nine Supplemental Indentures thereto dated, respectively, July 1, 1940, August 18, 1944, December 1, 1947, September 1, 1950, June 1, 1951, May 1, 1954, March 1, 1958, April 1, 1959, December 20, 1967, January 15, 1969, November 1, 1969, June 1, 1970, November 15, 1970, May 1, 1974, April 15, 1975, April 16, 1975, May 28, 1975, February 1, 1976, November 23, 1976, July 26, 1977, September 27, 1977, May 1, 1978, September 1, 1979, April 1, 1980, April 15, 1980, May 28, 1980, June 9, 1980, December 1, 1980, July 28, 1981, August 1, 1981, March 1, 1982, July 15, 1982, September 1, 1982, November 1, 1982, November 15, 1982, May 24, 1983, May 1, 1984, May 23, 1984, June 27, 1984, September 4, 1984, November 14, 1984, November 15, 1984, April 15, 1985, May 28, 1985, August 1, 1985, September 1, 1985, November 1, 1985, April 15, 1986, May 14, 1986, May 15, 1986, February 25, 1987, as of October 15, 1987, February 24, 1988, September 15, 1988, May 15, 1989, June 13, 1989, October 15, 1989, January 1, 1990, June 1, 1990, August 1, 1990, May 1, 1991, May 1, 1992, July 31, 1992, January 1, 1993, February 1, 1993, May 20, 1993, June 1, 1993, September 15, 1994 and May 1, 1995; and The 1940 Mortgage, as supplemented and modified by said Supplemental Indentures and by this Seventieth Supplemental Indenture, will be hereinafter collectively referred to as the "Indenture" and this Seventieth Supplemental Indenture will be hereinafter referred to as "this Supplemental Indenture"; and Pursuant to the provisions of the Indenture, the Company has issued 111 series of Bonds in the aggregate principal amount of $5,012,052,000, of which 5 2 73 series in the aggregate principal amount of $2,260,372,000 are no longer outstanding; and The Indenture provides among other things that the Company, from time to time, in addition to the Bonds authorized to be executed, authenticated and delivered pursuant to other provisions therein, may execute and deliver additional Bonds to the Trustee and the Trustee shall thereupon authenticate and deliver such Bonds to or upon the order of the Company; and The Company has determined to create pursuant to the provisions of the Indenture one new series of Bonds designated as "First Mortgage Bonds, 9 1/2% Series due 2005-B" (the "Bonds of this Series") with the denominations, rate of interest, date of maturity and other provisions and agreements in respect thereof as in this Supplemental Indenture set forth; and The Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Indenture, and pursuant to appropriate resolutions of its Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee this Supplemental Indenture in the form hereof for the purposes herein provided; and All conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized. NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That The Cleveland Electric Illuminating Company, in consideration of the premises and of the mutual covenants herein contained and of the sum of One Dollar ($1.00) to it duly paid by the Trustee at or before the ensealing and delivery of these presents and for other valuable considerations, the receipt whereof is hereby acknowledged, hereby covenants and agrees to and with the Trustee and its successors in the Trust under the Indenture, for the benefit of those who shall hold the Bonds and coupons, if any, issued and to be issued thereunder and under this Supplemental Indenture as hereinafter provided, as follows: 6 3 ARTICLE I CONFIRMATION OF 1940 MORTGAGE AND SUPPLEMENTAL INDENTURES The 1940 Mortgage (as modified in Article V of the Supplemental Indenture dated December 1, 1947, Article V of the Supplemental Indenture dated May 1, 1954, Article V of the Supplemental Indenture dated March 1, 1958, Article V of the Supplemental Indenture dated January 15, 1969, Article III of the Supplemental Indenture dated November 23, 1976 and Article III of the Supplemental Indenture dated April 15, 1985) and the Supplemental Indentures dated July 1, 1940, August 18, 1944, December 1, 1947, September 1, 1950, June 1, 1951, May 1, 1954, March 1, 1958, April 1, 1959, December 20, 1967, January 15, 1969, November 1, 1969, June 1, 1970, November 15, 1970, May 1, 1974, April 15, 1975, April 16, 1975, May 28, 1975, February 1, 1976, November 23, 1976, July 26, 1977, September 27, 1977, May 1, 1978, September 1, 1979, April 1, 1980, April 15, 1980, May 28, 1980, June 9, 1980, December 1, 1980, July 28, 1981, August 1, 1981, March 1, 1982, July 15, 1982, September 1, 1982, November 1, 1982, November 15, 1982, May 24, 1983, May 1, 1984, May 23, 1984, June 27, 1984, September 4, 1984, November 14, 1984, November 15, 1984, April 15, 1985, May 28, 1985, August 1, 1985, September 1, 1985, November 1, 1985, April 15, 1986, May 14, 1986, May 15, 1986, February 25, 1987, as of October 15, 1987, February 24, 1988, September 15, 1988, May 15, 1989, June 13, 1989, October 15, 1989, January 1, 1990, June 1, 1990, August 1, 1990, May 1, 1991, May 1, 1992, July 31, 1992, January 1, 1993, February 1, 1993, May 20, 1993, June 1, 1993, September 15, 1994 and May 1, 1995, respectively, are hereby in all respects confirmed. ARTICLE II CREATION, PROVISIONS, REDEMPTION, PRINCIPAL AMOUNT AND FORM OF BONDS OF THIS SERIES SECTION 1. The Company hereby creates a new series of Bonds to be issued under and secured by the Indenture and to be designated as "First Mortgage Bonds, 9 1/2% Series due 2005-B" of the Company and hereinabove and hereinafter called the "Bonds of this Series". The Bonds of this Series shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, all of the terms, conditions and covenants of the Indenture. 7 4 SECTION 2. The Bonds of this Series shall be issued as fully registered Bonds only, without coupons, in the denominations of $1,000 or any multiple thereof. SECTION 3. The Bonds of this Series shall be dated the date of authentication, shall mature May 15, 2005, and shall bear interest from the time hereinafter provided at the rate of 9 1/2% per annum payable on May 15 and November 15 in each year starting on November 15, 1995 (each such date hereinafter called an "interest payment date") on and until maturity, or, in the case of any such Bonds duly called for redemption, on and until the redemption date, or, in the case of any default by the Company in the payment of the principal due on any such Bonds, until the Company's obligation with respect to the payment of the principal shall be discharged as provided in the Indenture. The Bonds of this Series shall be payable as to principal (and premium, if any) and interest at the agency of the Company in the Borough of Manhattan, The City of New York, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. Except as hereinafter provided, each Bond of this Series shall bear interest from the most recent date to which interest has been paid or, if no interest has been paid, then from the date of initial authentication of such Bond, until the principal of such Bond is paid. Interest on the Bonds of this Series shall be computed on the basis of twelve 30-day months and a 360-day year. The interest payable on any interest payment date shall be paid to the respective persons in whose name the Bonds of this Series shall be registered at the close of business on the Record Date (hereinafter defined) with respect to such interest payment date, notwithstanding the cancellation of any such Bond upon any transfer or exchange thereof subsequent to such Record Date and prior to such interest payment date; provided, however, that, if and to the extent the Company shall default in the payment of the interest due on such interest payment date, such defaulted interest shall be paid to the respective persons in whose names such outstanding Bonds of this Series are registered at the close of business on a date (the "Subsequent Record Date") not less than ten days nor more than 30 days next preceding the date of payment of such defaulted interest, such Subsequent Record Date to be established by the Company by notice given by mail by or on behalf of the Company to the 8 5 registered owners of Bonds of this Series not less than ten days next preceding such Subsequent Record Date. The term "Record Date" shall mean, with respect to any interest payment date of any Bond of this Series, the close of business on the last day (whether or not a business day at the place of payment) of the calendar month next preceding such interest payment date. SECTION 4. In the manner and subject to the limitations provided in the Indenture, Bonds of this Series may be transferred or may be exchanged for a like aggregate principal amount of Bonds of such series of other authorized denominations, in either case without charge, except for any tax or taxes or other governmental charges incident to such transfer or exchange, at the agency of the Company in the Borough of Manhattan, The City of New York. In the event less than all of the Bonds of this Series at the time outstanding are called for redemption, the Company shall not be required (a) to register any transfer or make any exchange of any such Bond for a period of 15 days before the mailing of the notice of redemption of any such Bonds, (b) to register any transfer or make any exchange of any such Bond so called for redemption in its entirety or (c) to register any transfer or make any exchange of any portion of any such Bond which has been called for redemption. Except as otherwise provided in Section 3 of this Article II with respect to the payment of interest, the Company, the agencies of the Company and the Trustee may deem and treat the person in whose name a Bond of this Series is registered as the absolute owner thereof for the purpose of receiving any payment and for all other purposes. SECTION 5. The Bonds of this Series shall be redeemable as provided in the form of Bond of this Series set forth in this Supplemental Indenture, subject to the provisions contained in Article V of the Indenture and in said form of Bond of this Series. SECTION 6. Subject to the applicable provisions of the Indenture, written notice of redemption of Bonds of this Series pursuant to this Supplemental Indenture shall be given by the Trustee by mailing to each registered owner of such Bonds to be redeemed a notice of such redemption, first class postage prepaid, at its last address as it shall appear upon the books of the Company for the registration and transfer of such Bonds. Any notice of redemption shall be mailed at least 30 days, but no more than 60 days, prior to the redemption date. In the event of partial redemption of Bonds of this Series, the Trustee shall 9 6 select the Bonds of this Series to be redeemed, subject to the provisions of this Supplemental Indenture, in such manner as the Trustee shall deem appropriate and fair. SECTION 7. Any Bonds of this Series at any time purchased or otherwise acquired by the Company shall be surrendered to the Trustee for cancellation and the Trustee shall forthwith cancel the same. SECTION 8. The aggregate principal amount of Bonds of this Series which may be authenticated and delivered hereunder shall not exceed $300,000,000, except as otherwise provided in the Indenture. SECTION 9. The form of the fully registered Bonds of this Series and of the Trustee's certificate of authentication thereon shall be substantially as follows: 10 7 [FORM OF FULLY REGISTERED BOND OF THIS SERIES] THE CLEVELAND ELECTRIC ILLUMINATING COMPANY Incorporated under the laws of the State of Ohio FIRST MORTGAGE BOND, 9 1/2% SERIES DUE 2005-B Due May 15, 2005 No. $ THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, a corporation organized and existing under the laws of the State of Ohio (hereinafter called the "Company", which term shall include any successor corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay to , or registered assigns, the sum of Dollars or the aggregate unpaid principal amount hereof, whichever is less, on May 15, 2005 in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay interest on the unpaid principal amount hereof in like coin or currency from the time hereinafter provided, at the rate per annum specified in the title hereof, payable on May 15 and November 15 in each year starting on November 15, 1995 (each such date herein called an "interest payment date"), and on and until the date of maturity of this Bond, or, if this Bond shall be duly called for redemption, on and until the redemption date, or, if the Company shall default in the payment of the principal amount of this Bond, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the Indenture. Interest on this Bond shall be computed on the basis of twelve 30-day months and a 360-day year. Except as hereinafter provided, this Bond shall bear interest from the most recent date to which interest has been paid or, if no interest has been paid, then from the date of initial authentication of this Bond, until the principal of this Bond has been paid. Subject to certain exceptions provided in said Indenture, the interest payable on any interest payment date shall be paid to the person in whose name this Bond shall be registered at the close of business on the Record Date (hereinafter defined) or, in the case of defaulted interest, in the manner and to the person as provided in the Supplemental Indenture (hereinafter defined). Principal of (and premium, if any) and interest on this Bond are payable at the agency of the Company in the Borough of Manhattan, The City of New York. 11 8 The provisions of this Bond are continued on the reverse side hereof and such continued provisions shall have the same effect as though fully set forth in this place. This Bond shall not be entitled to any benefit under the Indenture or any indenture supplemental thereto, or become valid or obligatory for any purpose, until the Trustee under the Indenture, or a successor trustee thereto under the Indenture, shall have signed the form of certificate of authentication endorsed hereon. IN WITNESS WHEREOF, The Cleveland Electric Illuminating Company has caused this Bond to be signed in its name by its President (whose signature may be manual or a facsimile thereof) or a Vice President and its corporate seal (or a facsimile thereof) to be hereto affixed and attested by its Secretary (whose signature may be manual or a facsimile thereof) or an Assistant Secretary. Dated: THE CLEVELAND ELECTRIC ILLUMINATING COMPANY By ...................................................... Attest: ................................ Secretary [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Bond is one of the Bonds of the series designated and described in the within-mentioned Indenture and Supplemental Indenture. THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), TRUSTEE By ............................................. AUTHORIZED OFFICER 12 9 [REVERSE SIDE OF BOND OF THIS SERIES] This Bond is one of the duly authorized Bonds of the Company (herein called the "Bonds"), all issued and to be issued under and equally secured by a Mortgage and Deed of Trust dated July 1, 1940, executed by the Company to Guaranty Trust Company of New York as Trustee, under which The Chase Manhattan Bank (National Association) is successor trustee (herein called the "Trustee") and all indentures supplemental thereto (said Mortgage as so supplemented herein called the "Indenture"), to which reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of the registered owner or owners of the Bonds and of the Trustee in respect thereof, and the terms and conditions upon which the Bonds are, and are to be, secured. The Bonds may be issued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as in the Indenture provided. This Bond is one of a series designated as the First Mortgage Bonds, 9 1/2% Series due 2005-B (herein called the "Bonds of this Series"), limited, except as otherwise provided in the Indenture, to $300,000,000 in aggregate principal amount, issued under and secured by the Indenture and described in the Seventieth Supplemental Indenture dated May 2, 1995, between the Company and the Trustee (herein called the "Supplemental Indenture"). In the event that this Bond is deemed to be paid in full, this Bond shall be surrendered to the Trustee for cancellation. In the event that this Bond is deemed to be paid in part, this Bond may, at the option of the registered owner, be surrendered to the Trustee for cancellation, in which event the Trustee will cancel this Bond and the Company will execute and the Trustee will authenticate and deliver to the registered owner Bonds in authorized denominations in aggregate principal amount equal to the unpaid balance of the principal amount of this Bond. The Bonds of this Series are subject to redemption by the Company prior to maturity in whole at any time or in part from time to time, but in no instance before May 15, 2002, at a redemption price of 100% of the principal amount to be redeemed, plus accrued and unpaid interest, if any, to the redemption date. Any redemption of the Bonds of this Series shall be made after written notice has been given by the Trustee by mailing to each registered owner of such Bonds to be redeemed a notice of such redemption, first class postage prepaid, at its last address as it shall appear upon the books of the Company for the registration and transfer of such Bonds. Any notice of redemption shall be 13 10 mailed at least 30 days, but no more than 60 days, prior to the redemption date. In the event of partial redemption of Bonds of this Series, the Trustee shall select the Bonds of this Series to be redeemed, subject to the provisions of the Indenture, in such manner as the Trustee shall deem appropriate and fair. In the Forty-Third Supplemental Indenture dated April 15, 1985 between the Company and the Trustee, the Company has modified, in certain respects, the redemption provisions in the Indenture effective only with respect to the Bonds of all series established or created in said Forty-Third Supplemental Indenture and all supplemental indentures dated after May 28, 1985. To the extent permitted by and as provided in the Indenture, modifications or alterations of the Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the Company and of the holders of the Bonds and coupons may be made with the consent of the Company by an affirmative vote of not less than 80% in principal amount of the Bonds entitled to vote then outstanding, at a meeting of Bondholders called and held as provided in the Indenture, and, in case one or more but less than all of the series of Bonds then outstanding under the Indenture are so affected, by an affirmative vote of not less than 80% in principal amount of the Bonds of any series entitled to vote then outstanding and affected by such modification or alteration; provided, however, that no such modification or alteration shall be made which will affect the terms of payment of the principal of (or premium, if any) or interest on this Bond. In the Nineteenth Supplemental Indenture dated November 23, 1976 between the Company and the Trustee, the Company has modified the Indenture effective from and after the time when none of the Bonds of any series established prior to the execution of the Nineteenth Supplemental Indenture shall remain outstanding so as to change "80%" in the foregoing sentence to "60%" and to make certain other modifications of the Indenture and has reserved the right to make certain other modifications of the Indenture without any vote, consent or other action by the holders of Bonds of any series established in the Nineteenth Supplemental Indenture or in any subsequent supplemental indenture. If an event of default, as defined in the Indenture, shall occur, the principal of all the Bonds at any such time outstanding under the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Bonds outstanding. 14 11 The term "Record Date" shall mean, with respect to any interest payment date of any Bond of this Series, the close of business on the last day (whether or not a business day at the place of payment) of the calendar month next preceding such interest payment date. Subject to the limitations provided in the Indenture, this Bond is transferable by the registered owner hereof, in person or by duly authorized attorney, on the books of the Company to be kept for that purpose at the agency of the Company in the Borough of Manhattan, The City of New York, upon surrender and cancellation of this Bond, and upon presentation of a duly executed written instrument of transfer, and thereupon a new fully registered Bond or Bonds of the same series, for the same aggregate principal amount and in authorized denominations will be issued to the transferee or transferees in exchange therefor; and this Bond, with or without others of the same series, may in like manner be exchanged for one or more new fully registered Bonds of the same series of other authorized denominations but of the same aggregate principal amount; all without charge except for any tax or taxes or other governmental charges incidental to such transfer or exchange and all subject to the terms and conditions set forth in the Indenture. Except as otherwise provided herein with respect to the payment of interest, the Company, the agencies of the Company and the Trustee may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving any payment and for all other purposes. No recourse shall be had for the payment of the principal of (or premium, if any) or the interest on this Bond, or for any claim based hereon or on the Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or officer, past, present or future, of the Company, or of any predecessor or successor corporation, as such, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution or statute or otherwise, of incorporators, stockholders, directors or officers being released by every owner hereof by the acceptance of this Bond and as part of the consideration for the issue hereof, and being likewise released by the terms of the Indenture. 15 12 [END OF FORM OF FULLY REGISTERED BOND] ARTICLE III THE TRUSTEE SECTION 1. The Trustee hereby accepts the trusts hereby declared and provided upon the terms and conditions in the Indenture set forth and upon the terms and conditions set forth in this Article III. SECTION 2. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XIII of the Indenture shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate. ARTICLE IV MISCELLANEOUS PROVISIONS This Supplemental Indenture may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original; but such counterparts shall together constitute but one and the same instrument. EXECUTION IN WITNESS WHEREOF, said The Cleveland Electric Illuminating Company has caused this Supplemental Indenture to be executed on its behalf by its President or one of its Vice Presidents and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by its Secretary or an Assistant Secretary, and said The Chase Manhattan Bank (National Association), in evidence of its acceptance of the trust hereby created, has caused this Supplemental Indenture to be executed on its behalf by one of its Vice Presidents or one of its Trust Officers, and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by one of its Assistant Secretaries or corporate Trust Officers, all as of the day and year first above written. 16 S-1 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY By TERRENCE G. LINNERT Vice President Attest: J. T. PERCIO Secretary Signed, sealed and acknowledged by The Cleveland Electric Illuminating Company in the presence of PATRICIA BARKEY - ---------------------------------------- Patricia Barkey SONDRA CLARKE - ---------------------------------------- Sondra Clarke As witnesses [SEAL] 17 S-2 THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), AS TRUSTEE By VALERIE DUNBAR Second Vice President Attest: BROOKS VON ARX, JR. Corporate Trust Officer Signed, sealed and acknowledged by The Chase Manhattan Bank (National Association) in the presence of R.J. HALLERAN - ---------------------------------------- Ronald J. Halleran L.M. FITZPATRICK - ---------------------------------------- Lynn M. Fitzpatrick [SEAL] As witnesses 18 S-3 STATE OF OHIO ) COUNTY OF CUYAHOGA ) ss: On this 5th day of May, 1995 before me personally appeared TERRENCE G. LINNERT and J. T. PERCIO to me personally known, who being by me severally duly sworn, did say that they are a Vice President and the Secretary, respectively, of The Cleveland Electric Illuminating Company, that the seal affixed to the foregoing instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said corporation. AMY B. MCCABE ---------------------------------------- Notary Public Amy B. McCabe Notary Public, State of Ohio Recorded in Cuyahoga County My Commission expires October 23, 1999 STATE OF NEW YORK ) COUNTY OF NEW YORK ) ss: [SEAL] On this 8th day of May, 1995 before me personally appeared VALERIE DUNBAR and BROOKS VON ARX, JR. to me personally known, who being by me severally duly sworn, did say that they are a Second Vice President and a Corporate Trust Officer, respectively, of The Chase Manhattan Bank (National Association), that the seal affixed to the foregoing instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said corporation. MARGARET M. PRICE ---------------------------------------- Notary Public Margaret M. Price Notary Public, State of New York No. 24-4980599 Qualified in Kings County Commission Expires April 22, 1997 [SEAL] THIS INSTRUMENT PREPARED BY BRUCE T. ROSENBAUM, ATTORNEY AT LAW. 19 R-1 This page contains information as to recording and filing which was not set forth in this Supplemental Indenture at the time of execution. This page is not a part of this Supplemental Indenture. RECORDING AND FILING DATA This Supplemental Indenture was filed for record and recorded in the record of mortgages in the offices of the Recorders of the following Counties:
COUNTY VOLUME PAGE FILED FOR RECORD - ------------------------------- --------------- --------------------- Ohio Ashtabula 81 3051 May 12, 1995 Cuyahoga 95-03573 41 May 12, 1995 Erie 221 232 May 11, 1995 Geauga 1014 1240 May 12, 1995 Lake 1115 742 May 12, 1995 Lorain 1081 46 May 12, 1995 Ottawa 454 64 May 11, 1995 Portage 24 555 May 12, 1995 Stark Instrument No. 95020113 May 12, 1995 Summit 1923 982 May 12, 1995 Trumbull 931 536 May 12, 1995 Pennsylvania Warren 1367 639 May 12, 1995 Beaver 605 87 May 12, 1995
An amendment to a previously filed financing statement and a counterpart of this Supplemental Indenture were filed in the office of the Secretary of the Commonwealth of Pennsylvania on May 12, 1995 under original or amendment file number 13451763, microfilm number 24280159, to comply with the filing requirements of the Pennsylvania enactment of the Uniform Commercial Code. EX-4.C 5 EXHIBIT 4.C 1 Exhibit 4(c) [CONFORMED] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE CLEVELAND ELECTRIC ILLUMINATING COMPANY TO THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) (successor to Morgan Guaranty Trust Company of New York, formerly Guaranty Trust Company of New York) As Trustee under The Cleveland Electric Illuminating Company's Mortgage and Deed of Trust, Dated July 1, 1940 ------------------ SEVENTY-FIRST SUPPLEMENTAL INDENTURE DATED JUNE 1, 1995 First Mortgage Bonds, Collateral Series A First Mortgage Bonds, Collateral Series B - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 i THE CLEVELAND ELECTRIC ILLUMINATING COMPANY Seventy-First Supplemental Indenture Dated June 1, 1995 TABLE OF CONTENTS*
PAGE ---------- PARTIES......................................................... 1 RECITALS: Indenture and Supplemental Indentures......................... 1 First Mortgage Bonds outstanding.............................. 1 Authorization by Indenture of issue of additional Bonds....... 1 Bonds of Collateral Series A.................................. 2 Bonds of Collateral Series B.................................. 2 Purpose of Seventy-First Supplemental Indenture............... 3 Authorization of Seventy-First Supplemental Indenture......... 3 Compliance with conditions to making of Seventy-First Supplemental Indenture..................................... 3 ARTICLE I -- CONFIRMATION OF 1940 MORTGAGE AND SUPPLEMENTAL INDENTURES....................................... 3 ARTICLE II -- CREATION, PROVISIONS, REDEMPTION, PRINCIPAL AMOUNT AND FORM OF BONDS OF COLLATERAL SERIES A............... 4 Section 1 -- Creation and designation of Bonds of Collateral Series A and compliance with Indenture........ 4 Section 2 -- Date of Bonds of Collateral Series A, maturity date, interest rate, accrual date and payment dates...... 4 Section 3 -- Place of Payment.............................. 5 Section 4 -- Denomination of Bonds of Collateral Series A........................................................ 5 Section 5 -- Transfer of Bonds of Collateral Series A...... 5 Section 6 -- Registration.................................. 5 Section 7 -- Payments under Revolving Credit Agreement..... 5 Section 8 -- Redemption of Bonds of Collateral Series A.... 6
- --------------- *The Table of Contents, the page headings and the recording data are not part of the Seventy-First Supplemental Indenture as executed. 3 ii
PAGE ---------- Section 9 -- Redemption of Bonds of Collateral Series A in an "Event of Default" under the Revolving Credit Agreement................................................ 6 Section 10 -- Form of Fully Registered Bond of Collateral Series A................................................. 6 Form of Trustee's Certificate of Authentication.............................. 11 ARTICLE III -- CREATION, PROVISIONS, REDEMPTION, PRINCIPAL AMOUNT AND FORM OF BONDS OF COLLATERAL SERIES B............... 11 Section 1 -- Creation and designation of Bonds of Collateral Series B and compliance with Indenture........ 11 Section 2 -- Date of Bonds of Collateral Series B, maturity date, interest rate, accrual date and payment dates...... 11 Section 3 -- Place of Payment.............................. 12 Section 4 -- Denomination of Bonds of Collateral Series B........................................................ 12 Section 5 -- Transfer of Bonds of Collateral Series B...... 12 Section 6 -- Registration.................................. 13 Section 7 -- Payments under Reimbursement Agreement........ 13 Section 8 -- Redemption of Bonds of Collateral Series B.... 13 Section 9 -- Redemption of Bonds of Collateral Series B in "Reimbursement Event of Default" under the Reimbursement Agreement................................................ 13 Section 10 -- Form of Fully Registered Bond of Collateral Series B................................................. 14 Form of Trustee's Certificate of Authentication.............................. 18 ARTICLE IV -- THE TRUSTEE....................................... 19 Section 1 -- Acceptance by Trustee......................... 19 Section 2 -- Responsibility of Trustee..................... 19 Section 3 -- Reliance by Trustee upon certain demands, certificates and opinions................................ 19 ARTICLE V -- MISCELLANEOUS PROVISIONS........................... 19
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PAGE ---------- EXECUTION....................................................... 19 COMPANY'S ACKNOWLEDGMENT........................................ S-3 TRUSTEE'S ACKNOWLEDGMENT........................................ S-4 RECORDING AND FILING DATA....................................... R-1
5 SEVENTY-FIRST SUPPLEMENTAL INDENTURE, dated June 1, 1995, made by and between THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, a corporation organized and existing under the laws of the State of Ohio (the "Company"), and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) (successor to MORGAN GUARANTY TRUST COMPANY OF NEW YORK), a national banking association existing under the laws of the United States of America, with its head office at 1 Chase Manhattan Plaza, the City of New York (the "Trustee"), as Trustee under the Mortgage and Deed of Trust dated July 1, 1940, hereinafter mentioned: RECITALS In order to secure First Mortgage Bonds of the Company ("Bonds"), the Company has heretofore executed and delivered to the Trustee the Mortgage and Deed of Trust dated July 1, 1940 (the "1940 Mortgage") and seventy Supplemental Indentures thereto dated, respectively, July 1, 1940, August 18, 1944, December 1, 1947, September 1, 1950, June 1, 1951, May 1, 1954, March 1, 1958, April 1, 1959, December 20, 1967, January 15, 1969, November 1, 1969, June 1, 1970, November 15, 1970, May 1, 1974, April 15, 1975, April 16, 1975, May 28, 1975, February 1, 1976, November 23, 1976, July 26, 1977, September 27, 1977, May 1, 1978, September 1, 1979, April 1, 1980, April 15, 1980, May 28, 1980, June 9, 1980, December 1, 1980, July 28, 1981, August 1, 1981, March 1, 1982, July 15, 1982, September 1, 1982, November 1, 1982, November 15, 1982, May 24, 1983, May 1, 1984, May 23, 1984, June 27, 1984, September 4, 1984, November 14, 1984, November 15, 1984, April 15, 1985, May 28, 1985, August 1, 1985, September 1, 1985, November 1, 1985, April 15, 1986, May 14, 1986, May 15, 1986, February 25, 1987, October 15, 1987, February 24, 1988, September 15, 1988, May 15, 1989, June 13, 1989, October 15, 1989, January 1, 1990, June 1, 1990, August 1, 1990, May 1, 1991, May 1, 1992, July 31, 1992, January 1, 1993, February 1, 1993, May 20, 1993, June 1, 1993, September 15, 1994, May 1, 1995 and May 2, 1995; and The 1940 Mortgage, as supplemented and modified by said Supplemental Indentures and by this Seventy-First Supplemental Indenture, will be hereinafter collectively referred to as the "Indenture" and this Seventy-first Supplemental Indenture will be hereinafter referred to as "this Supplemental Indenture"; and Pursuant to the provisions of the Indenture, the Company has issued 112 series of Bonds in the aggregate principal amount of $5,312,052,000, of which 6 2 74 series in the aggregate principal amount of $2,402,037,000 are no longer outstanding; and The Indenture provides among other things that the Company, from time to time, in addition to the Bonds authorized to be executed, authenticated and delivered pursuant to other provisions therein, may execute and deliver additional Bonds to the Trustee and the Trustee shall thereupon authenticate and deliver such Bonds to or upon the order of the Company; and The Company has determined to create pursuant to the provisions of the Indenture two new series of Bonds designated, respectively, as "First Mortgage Bonds, Collateral Series A" (the "Bonds of Collateral Series A") and "First Mortgage Bonds, Collateral Series B" (the "Bonds of Collateral Series B"), each such series with the respective denominations, rates of interest, dates of maturity, redemption provisions and other provisions and agreements in respect thereof as in this Supplemental Indenture set forth; and The Bonds of Collateral Series A are to be delivered to the Revolver Agent Bank (hereinafter defined) to (i) provide for the payment of the Company's obligations to make payments to any person under the Guaranty of the Company and The Toledo Edison Company dated May 14, 1993 (such guaranty, as amended from time to time herein called the "Guaranty"), in favor of the Lenders party to the Credit Agreement dated as of May 14, 1993, as amended, among Centerior Energy Corporation and Centerior Service Company ("Obligors") and Citibank, N.A., as Agent, and the other banks named therein (such credit agreement, as amended from time to time, herein called the "Revolving Credit Agreement"), and (ii) to provide to such persons the benefits of the security provided for the Bonds of Collateral Series A. As used herein, the term "Lenders" shall refer collectively to all banks which are parties to the Revolving Credit Agreement and the term "Revolver Agent Bank" shall refer to the bank designated in the Revolving Credit Agreement as the party responsible for holding the Bonds of Collateral Series A as agent for the benefit of the Lenders. The Bonds of Collateral Series B are to be delivered to the LC Agent Bank (hereinafter defined) to (i) provide for the payment of the Company's obligations to make payments to any person under the Reimbursement Agreement dated as of June 29, 1995 among the Company, The Toledo Edison Company, Barclays Bank PLC, acting through its New York Branch, as Fronting Bank, Administrative Agent, Collateral Agent and Co-Agent, Union Bank, Society National Bank and Chemical Bank, as Co-Agents, and the 7 3 participating banks named therein (such reimbursement agreement, as amended from time to time, herein called the "Reimbursement Agreement") and (ii) to provide to such persons the benefits of the security provided for the Bonds of Collateral Series B. As used herein, the term "Participating Banks" shall refer collectively to all banks which are parties to the Reimbursement Agreement and the term "LC Agent Bank" shall refer to the bank designated in the Reimbursement Agreement as the party responsible for holding the Bonds of Collateral Series B as agent for the benefit of the Participating Banks. The Company, in the exercise of the powers and authority conferred upon and reserved to it under the provisions of the Indenture, and pursuant to appropriate resolutions of the Board of Directors, has duly resolved and determined to make, execute and deliver to the Trustee this Supplemental Indenture in the form hereof for the purposes herein provided; and All conditions and requirements necessary to make this Supplemental Indenture a valid, binding and legal instrument have been done, performed and fulfilled and the execution and delivery hereof have been in all respects duly authorized. NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That The Cleveland Electric Illuminating Company, in consideration of the premises and of the mutual covenants herein contained and of the sum of One Dollar ($1.00) to it duly paid by the Trustee at or before the ensealing and delivery of these presents and for other valuable considerations, the receipt whereof is hereby acknowledged, hereby covenants and agrees to and with the Trustee and its successors in the Trust under the Indenture, for the benefit of those who shall hold the Bonds and coupons, if any, issued and to be issued thereunder and under this Supplemental Indenture as hereinafter provided, as follows: ARTICLE I CONFIRMATION OF 1940 MORTGAGE AND SUPPLEMENTAL INDENTURES The 1940 Mortgage (as modified in Article V of the Supplemental Indenture dated December 1, 1947, Article V of the Supplemental Indenture dated May 1, 1954, Article V of the Supplemental Indenture dated March 1, 1958, Article V of the Supplemental Indenture dated January 15, 1969, Article III of the Supplemental Indenture dated November 23, 1976 and Article III of the Supplemental Indenture dated April 15, 1985) and the Supplemental 8 4 Indentures dated July 1, 1940, August 18, 1944, December 1, 1947, September 1, 1950, June 1, 1951, May 1, 1954, March 1, 1958, April 1, 1959, December 20, 1967, January 15, 1969, November 1, 1969, June 1, 1970, November 15, 1970, May 1, 1974, April 15, 1975, April 16, 1975, May 28, 1975, February 1, 1976, November 23, 1976, July 26, 1977, September 27, 1977, May 1, 1978, September 1, 1979, April 1, 1980, April 15, 1980, May 28, 1980, June 9, 1980, December 1, 1980, July 28, 1981, August 1, 1981, March 1, 1982, July 15, 1982, September 1, 1982, November 1, 1982, November 15, 1982, May 24, 1983, May 1, 1954, May 23, 1984, June 27, 1984, September 4, 1984, November 14, 1984, November 15, 1984, April 15, 1985, May 28, 1985, August 1, 1985, September 1, 1985, November 1, 1985, April 15, 1986, May 14, 1986, May 15, 1986, February 25, 1987, October 15, 1987, February 24, 1988, September 15, 1988, May 15, 1989, June 13, 1989, October 15, 1989, January 1, 1990, June 1, 1990, August 1, 1990, May 1, 1991, May 1, 1992, July 31, 1992, January 1, 1993, February 1, 1993, May 20, 1993, June 1, 1993, September 15, 1994, May 1, 1995 and May 2, 1995, respectively, are hereby in all respects confirmed. ARTICLE II CREATION, PROVISIONS, REDEMPTION, PRINCIPAL AMOUNT AND FORM OF BONDS OF COLLATERAL SERIES A SECTION 1. The Company hereby creates a new series of Bonds to be issued under and secured by the Indenture and to be designated as "First Mortgage Bonds, Collateral Rate Series A" of the Company and hereinabove and hereinafter called the "Bonds of Collateral Series A". The Bonds of Collateral Series A shall be limited to an aggregate principal amount of $50,000,000 but the aggregate principal amount thereof outstanding at any time shall not exceed such lesser amount as is equal to 40% of the aggregate amount from time to time of the Lenders' Commitments (as defined in the Revolving Credit Agreement). The Bonds of Collateral Series A shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, all of the terms, conditions and covenants of the Indenture. SECTION 2. The Bonds of Collateral Series A shall be dated the date of authentication, shall be payable in whole or in installments on such date or dates as the Company has any obligations under the Guaranty to make any payment to the Lenders, but not later than June 1, 2006, and shall bear interest from the time hereinafter provided at such rate per annum on each interest 9 5 payment date (hereinafter defined) as shall cause the amount of interest payable on each interest payment date on the Bonds of Collateral Series A to equal 40% of the amount of interest and fees payable on such interest payment date under the Revolving Credit Agreement. Such interest shall be payable on the same dates as interest or fees are payable from time to time pursuant to the Revolving Credit Agreement (each such date herein called an "interest payment date"), until the maturity of the Bonds of Collateral Series A, or, in the case the Revolver Agent Bank shall demand redemption of any such Bonds, until the redemption date, or, in the case of any default by the Company in the payment of the principal due on any such Bonds, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the Indenture. The amount of interest and fees payable from time to time under the Revolving Credit Agreement, the basis on which such interest and fees are computed and the dates on which such interest and fees are payable are set forth in the Revolving Credit Agreement. Except as hereinafter provided, each Bond of Collateral Series A shall bear interest (a) from the interest payment date next preceding the date of such Bond to which interest has been paid, or (b) if the date of such Bond is an interest payment date to which interest has been paid, then from such date, or (c) if no interest has been paid thereon, then from the date of initial issue. SECTION 3. The Bonds of Collateral Series A shall be payable as to principal and interest at the same place or places as payments are required to be made by the Company under the Guaranty; and both principal and interest shall be payable in any coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts. SECTION 4. The Bonds of Collateral Series A shall be issued as one fully registered Bond in the denomination of $50,000,000. SECTION 5. In the manner and subject to the limitations provided in the Indenture, Bonds of Collateral Series A may be transferred only to a successor to the Revolver Agent Bank under the Revolving Credit Agreement, without charge, except for any tax or taxes or other governmental charges incident to such transfer or exchange, at the agency of the Company in the Borough of Manhattan, The City of New York. SECTION 6. The Bonds of Collateral Series A shall be registered in the name of the Revolver Agent Bank. 10 6 SECTION 7. Any payment made in respect of the Company's obligations under the Guaranty or by the Obligors under the Revolving Credit Agreement shall be deemed a payment in respect of the Bonds of Collateral Series A, but such payment shall not reduce the principal amount of the Bonds of Collateral Series A unless the aggregate amount of the Lenders' Commitments is irrevocably reduced concurrently with such payment. In the event that all of the Company's obligations under the Guaranty and the obligations of the Obligors under the Revolving Credit Agreement have been discharged, the Bonds of Collateral Series A shall be deemed to be paid in full. SECTION 8. The Bonds of Collateral Series A shall be redeemable only to the extent provided in this Article II, subject to the provisions contained in the form of Bond of Collateral Series A. SECTION 9. The Bonds of Collateral Series A shall be redeemed by the Company in whole at any time prior to maturity at a redemption price of 100% of the principal amount to be redeemed, plus any accrued and unpaid interest to the redemption date and all other amounts payable by the Company under the Guaranty, but only if the Trustee shall receive a written demand from the Revolver Agent Bank for redemption of all Bonds of Collateral Series A held by the Revolver Agent Bank stating that an "Event of Default" under the Revolving Credit Agreement has occurred and is continuing and that payment of the principal amount outstanding under the Revolving Credit Agreement, all interest thereon and all other amounts payable thereunder are immediately due and payable and demanding payment thereof; provided, however, that the Bonds of Collateral Series A shall not be redeemed in the event that prior to the date of such redemption the Trustee shall have received a certificate of the Revolver Agent Bank (a) stating that there has been a waiver of such Event of Default or (b) withdrawing said written demand. The redemption of the Bonds of Collateral Series A shall be made forthwith upon receipt of such demand by the Company from the Majority Banks (as defined in the Revolving Credit Agreement), the Revolver Agent Bank on behalf of the Majority Banks, or the Trustee. SECTION 10. The form of the fully registered Bonds of Collateral Series A and of the Trustee's certificate of authentication thereon, shall be substantially as follows: 11 7 [FORM OF FULLY REGISTERED BOND OF COLLATERAL SERIES A] THIS BOND IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR AGENT BANK UNDER THE CREDIT AGREEMENT DATED AS OF MAY 14, 1993, AS AMENDED, AMONG CENTERIOR ENERGY CORPORATION AND CENTERIOR SERVICE COMPANY (COLLECTIVELY, THE "OBLIGORS") AND CITIBANK, N.A. AND THE BANKS NAMED THEREIN (SUCH CREDIT AGREEMENT, AS AMENDED FROM TIME TO TIME, THE "REVOLVING CREDIT AGREEMENT"). THE CLEVELAND ELECTRIC ILLUMINATING COMPANY Incorporated under the laws of the State of Ohio FIRST MORTGAGE BOND, COLLATERAL SERIES A No. $ THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, a corporation organized and existing under the laws of the State of Ohio (hereinafter called the "Company", which term shall include any successor corporation as defined in the Indenture hereinafter referred to), for value received, hereby promises to pay to , or registered assigns, the sum of Fifty Million Dollars ($50,000,000) or such lesser principal amount as is equal to 40% of the aggregate amount from time to time of the Lenders' Commitments (as defined in the Revolving Credit Agreement), in whole or in installments on such date or dates as the Company has any obligation to make payments under the Guaranty of the Company and The Toledo Edison Company dated May 14, 1993, as amended (the "Guaranty"), in favor of the Lenders (as defined in the Revolving Credit Agreement), but not later than June 1, 2006, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay interest on the unpaid principal amount hereof in like coin or currency from the time hereinafter provided at such rate per annum on each interest payment date (hereinafter defined) as shall cause the amount of interest payable on such interest payment date on the Bonds of Collateral Series A (hereinafter defined) to equal 40% of the amount of interest and fees payable on such interest payment date under the Revolving Credit Agreement. Such interest shall be payable on the same dates as interest or fees are payable from time to time pursuant to the Revolving Credit Agreement (each such date herein called an "interest payment date"), until the maturity of this Bond, or, if the Agent Bank shall demand redemption of this Bond, until the redemption date, or, if the Company shall default in the payment of the 12 8 principal due on this Bond, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in said Indenture. The amount of interest and fees payable from time to time under the Revolving Credit Agreement, the basis on which such interest and fees are computed and the dates on which such interest and fees are payable are set forth in the Revolving Credit Agreement. Except as hereinafter provided, this Bond shall bear interest (a) from the interest payment date next preceding the date of this Bond to which interest has been paid, or (b) if the date of this Bond is an interest payment date to which interest has been paid, then from such date, or (c) if no interest has been paid on this Bond, then from the date of initial issue. This Bond is one of the duly authorized Bonds of the Company (herein called the "Bonds"), all issued and to be issued under and equally secured by a Mortgage and Deed of Trust dated July 1, 1940, executed by the Company to Guaranty Trust Company of New York as Trustee under which The Chase Manhattan Bank (National Association) is successor trustee (herein called the "Trustee"), and all indentures supplemental thereto (said Mortgage as so supplemented herein called the "Indenture") to which reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of the registered owner or owners of the Bonds and of the Trustee in respect thereof, and the terms and conditions upon which the Bonds are, and are to be, secured. The Bonds may be issued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as in the Indenture provided. This Bond is the only Bond of a series designated as the First Mortgage Bonds, Collateral Series A (herein called the "Bonds of Collateral Series A") limited, except as otherwise provided in the Indenture, in aggregate principal amount to $50,000,000 but the aggregate principal amount hereof outstanding at any time shall not exceed such lesser amount as is equal to 40% of the aggregate amount of the Lenders' Commitments and is issued under and secured by the Indenture and described in the Seventy-First Supplemental Indenture dated June 1, 1995, between the Company and the Trustee (herein called the "Supplemental Indenture"). The Bonds of Collateral Series A have been issued by the Company to the Agent Bank (i) to provide for the payment of the Company's obligations to make payments to any person under the Guaranty, and (ii) to provide to such persons the benefits of the security provided for the Bonds of Collateral Series A. 13 9 As used herein, the term "Agent Bank" shall refer to the bank designated in the Revolving Credit Agreement as the party responsible for holding the Bonds of Collateral Series A as agent for the benefit of the Lenders. The Bonds of Collateral Series A have been delivered to the Agent Bank as agent for the benefit of the Lenders. Any payment made in respect of the Company's obligations under the Guaranty or by the Obligors under the Revolving Credit Agreement shall be deemed a payment in respect of the Bonds of Collateral Series A, but such payment shall not reduce the principal amount of the Bonds of Collateral Series A unless the aggregate amount of the Lenders' Commitments is irrevocably reduced concurrently with such payment. In the event that all of the Company's obligations under the Guaranty and the obligations of the Obligors under the Revolving Credit Agreement have been discharged, this Bond shall be deemed to have been paid in full and shall be surrendered to the Trustee for cancellation. The Bonds of Collateral Series A are subject to redemption prior to maturity at the demand of the Agent Bank as provided in Section 9 of Article II of the Supplemental Indenture at a redemption price of 100% of the principal amount to be redeemed and any accrued and unpaid interest and all other amounts payable by the Company under the Guaranty. To the extent permitted by and as provided in the Indenture, modifications or alterations of the Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the Company and of the holders of the Bonds and coupons may be made with the consent of the Company by an affirmative vote of not less than 80% in principal amount of the Bonds entitled to vote then outstanding, at a meeting of Bondholders called and held as provided in the Indenture, and, in case one or more but less than all of the series of Bonds then outstanding under the Indenture are so affected, by an affirmative vote of not less than 80% in principal amount of the Bonds of any series entitled to vote then outstanding and affected by such modification or alteration; provided, however, that no such modification or alteration shall be made which will affect the terms of payment of the principal of or premium, if any, or interest on this Bond. In the Nineteenth Supplemental Indenture dated November 23, 1976 between the Company and the Trustee, the Company has modified the Indenture effective from and after the time when none of the Bonds of any series established prior to the execution of the Nineteenth Supplemental Indenture shall remain outstanding so as to change "80%" in the foregoing sentence to "60%" and to make certain other modifications of the 14 10 Indenture and has reserved the right to make certain other modifications of the Indenture without any vote, consent or other action by the holders of Bonds of any series established in the Nineteenth Supplemental Indenture or in any subsequent supplemental indenture. If an event of default, as defined in the Indenture, shall occur, the principal of all the Bonds at any such time outstanding under the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Bonds outstanding. No recourse shall be had for the payment of the principal of or the interest or premium, if any, on this Bond, or for any claim based hereon or on the Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or officer, past, present or future, of the Company, or of any predecessor or successor corporation, as such, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution or statute or otherwise, of incorporators, stockholders, directors or officers being released by every owner hereof by the acceptance of this Bond and as part of the consideration for the issue hereof, and being likewise released by the terms of the Indenture. This Bond shall not be entitled to any benefit under the Indenture or any indenture supplemental thereto, or become valid or obligatory for any purpose, until the Trustee under the Indenture, or a successor trustee thereto under the Indenture, shall have signed the form of certificate of authentication endorsed hereon. IN WITNESS WHEREOF, The Cleveland Electric Illuminating Company has caused this Bond to be signed in its name by its President or a Vice President and its corporate seal to be hereto affixed and attested by its Secretary or an Assistant Secretary. Dated: THE CLEVELAND ELECTRIC ILLUMINATING COMPANY 15 11 By ...................................................... Vice President ATTEST: ........................... Secretary [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Bond is one of the Bonds of the series designated and described in the within-mentioned Indenture and Supplemental Indenture. THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) Trustee By....................................................... Authorized Officer [END OF FORM OF FULLY REGISTERED BOND OF COLLATERAL SERIES A] ARTICLE III CREATION, PROVISIONS, REDEMPTION, PRINCIPAL AMOUNT AND FORM OF BONDS OF COLLATERAL SERIES B SECTION 1. The Company hereby creates a new series of Bonds to be issued under and secured by the Indenture and to be designated as "First Mortgage Bonds, Collateral Series B" of the Company and hereinabove and hereinafter called the "Bonds of Collateral Series B". The Bonds of Collateral Series B shall be executed, authenticated and delivered in accordance with the provisions of, and shall in all respects be subject to, all of the terms, conditions and covenants of the Indenture. The aggregate principal amount of Bonds of Collateral Series B shall not exceed $90,400,000 but the aggregate principal amount thereof outstanding at any time shall not exceed such lesser amount as is equal to 40% of the sum of (a) the Maximum Available Credit Amount (as defined in the Reimbursement Agreement) from time to time of the Letters of 16 12 Credit (as defined in its Reimbursement Agreement) plus (b) the aggregate principal amount of Letter of Credit drawings and Advances (as defined in the Reimbursement Agreement) outstanding from time to time under the Reimbursement Agreement minus (c) the amount, if any, of cash collateral held by the LC Agent Bank under the Reimbursement Agreement ("LC Cash Collateral"). SECTION 2. The Bonds of Collateral Series B shall be dated the date of authentication, shall be payable in whole or in installments on such date or dates as the Company has any obligations to (i) reimburse the Fronting Bank (as defined in the Reimbursement Agreement) for any amounts paid by the Fronting Bank under a Letter of Credit, or (ii) repay any Advance, but not later than June 1, 2017, and shall bear interest from the time hereinafter provided at such rate per annum on each interest payment date (hereinafter defined) as shall cause the amount of interest payable on such interest payment date on the Bonds of Collateral Series B to equal 40% of the amount of interest and fees payable on such interest payment date under the Reimbursement Agreement multiplied by a fraction, the numerator of which is the aggregate principal amount of Bonds of Collateral Series B then outstanding and the denominator of which is such aggregate principal amount plus 40% of the amount, if any, of LC Cash Collateral. Such interest shall be payable on the same dates as interest or fees are payable from time to time pursuant to the Reimbursement Agreement (each such date herein called an "interest payment date"), until the maturity of the Bonds of Collateral Series B, or, in the case the LC Agent Bank shall demand redemption of any such Bonds, until the redemption date, or, in the case of any default by the Company in the payment of the principal due on any such Bonds, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the Indenture. The amount of interest and fees payable from time to time under the Reimbursement Agreement, the basis on which such interest is computed and the dates on which such interest and fees are payable are set forth in the Reimbursement Agreement. Except as hereinafter provided, each Bond of Collateral Series B shall bear interest (a) from the interest payment date next preceding the date of such Bond to which interest has been paid, or (b) if the date of such Bond is an interest payment date to which interest has been paid, then from such date, or (c) if no interest has been paid thereon, then from the date of initial issue. 17 13 SECTION 3. The Bonds of Collateral Series B shall be payable as to principal and interest at the same place or places as payments are required to be made by the Company under the Reimbursement Agreement; and both principal and interest shall be payable in any coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts. SECTION 4. The Bonds of Collateral Series B shall be issued as one fully registered Bond in the denomination of $90,400,000. SECTION 5. In the manner and subject to the limitations provided in the Indenture, Bonds of Collateral Series B may be transferred only to a successor to the LC Agent Bank under the Reimbursement Agreement without charge, except for any tax or taxes or other governmental charges incident to such transfer or exchange, at the agency of the Company in the Borough of Manhattan, The City of New York. SECTION 6. The Bonds of Collateral Series B shall be registered in the name of the LC Agent Bank. SECTION 7. Any payment made in respect of the Company's obligations under the Reimbursement Agreement shall be deemed a payment in respect of the Bonds of Collateral Series B, but such payment shall not reduce the principal amount of the Bonds of Collateral Series B unless the sum of (a) the Maximum Available Credit Amount of the Letters of Credit plus (b) the aggregate principal amount of Letter of Credit drawings and Advances then outstanding under the Reimbursement Agreement is irrevocably reduced concurrently with such payment. In the event that all of the Company's obligations under the Reimbursement Agreement have been discharged, the Bonds of Collateral Series B shall be deemed to be paid in full. SECTION 8. The Bonds of Collateral Series B shall be redeemable only to the extent provided in this Article III, subject to the provisions contained in the form of Bond of Collateral Series B. SECTION 9. The Bonds of Collateral Series B shall be redeemed by the Company in whole at any time prior to maturity at a redemption price of 100% of the principal amount to be redeemed, plus any accrued and unpaid interest to the redemption date, but only if the Trustee shall receive a written demand from the LC Agent Bank for redemption of all Bonds of Collateral Series B 18 14 held by the LC Agent Bank stating that a "Reimbursement Event of Default" under the Reimbursement Agreement has occurred and is continuing and that payment of the Advances and all other principal amounts outstanding under the Reimbursement Agreement, all interest thereon and all other amounts payable thereunder are due and payable within two Business Days (as defined in the Reimbursement Agreement) after demand therefor by the Required Banks (as defined in the Reimbursement Agreement) or are then due and payable; provided, however, that the Bonds of Collateral Series B shall not be redeemed in the event that prior to the date of such redemption the Trustee shall have received a certificate of the LC Agent Bank (a) stating that there has been a waiver of such Reimbursement Event of Default or (b) withdrawing said written demand. The redemption of the Bonds of Collateral Series B shall be made forthwith upon receipt of such demand by the Company from the Required Banks, the LC Agent Bank on behalf of the Required Banks, or the Trustee. SECTION 10. The form of the fully registered Bonds of Collateral Series B and of the Trustee's certificate of authentication thereon, shall be substantially as follows: [FORM OF FULLY REGISTERED BOND OF COLLATERAL SERIES B] THIS BOND IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR AGENT BANK UNDER THE REIMBURSEMENT AGREEMENT DATED AS OF JUNE 29, 1995 AMONG THE COMPANY AND THE TOLEDO EDISON COMPANY AND BARCLAYS BANK PLC, UNION BANK, SOCIETY NATIONAL BANK AND CHEMICAL BANK AND THE OTHER BANKS NAMED THEREIN (SUCH REIMBURSEMENT AGREEMENT, AS AMENDED FROM TIME TO TIME, THE "REIMBURSEMENT AGREEMENT"). THE CLEVELAND ELECTRIC ILLUMINATING COMPANY Incorporated under the laws of the State of Ohio FIRST MORTGAGE BOND, COLLATERAL SERIES B NO. $ THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, a corporation organized and existing under the laws of the State of Ohio (hereinafter called the "Company", which term shall include any successor corporation as defined 19 15 in the Indenture hereinafter referred to), for value received, hereby promises to pay to , or registered assigns, the sum of Ninety Million, Four Hundred Thousand Dollars ($90,400,000) or such lesser amount as is equal to 40% of the sum of (a) the Maximum Available Credit Amount (as defined in the Reimbursement Agreement) from time to time of the Letters of Credit (as defined in the Reimbursement Agreement) plus (b) the aggregate principal amount of Letter of Credit drawings and Advances (as defined in the Reimbursement Agreement) outstanding from time to time under the Reimbursement Agreement minus (c) the amount, if any, of cash collateral held by the Agent Bank (hereinafter defined) under the Reimbursement Agreement ("Cash Collateral"), in whole or in installments on such date or dates as the Company has any obligation to (i) reimburse the Fronting Bank (as defined in the Reimbursement Agreement) for any amounts paid by the Fronting Bank under a Letter of Credit, or (ii) repay any Advances, but not later than June 1, 2017, at the same place or places as such reimbursement and repayment obligations are payable, in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts, and to pay interest on the unpaid principal amount hereof in like coin or currency from the time hereinafter provided at such rate per annum on each interest payment date (hereinafter defined) as shall cause the amount of interest payable on such interest payment date on the Bonds of Collateral Series B (hereinafter defined) to equal 40% of the amount of interest and fees payable on such interest payment date under the Reimbursement Agreement multiplied by a fraction, the numerator of which is the aggregate principal amount of Bonds of Collateral Series B then outstanding and the denominator of which is such aggregate principal amount plus 40% of the amount, if any, of Cash Collateral. Such interest shall be payable on the same dates as interest or fees are payable from time to time pursuant to the Reimbursement Agreement (each such date herein called an "interest payment date"), until the maturity of this Bond, or, if the Agent Bank shall demand redemption of this Bond, until the redemption date, or, if the Company shall default in the payment of the principal due on this Bond, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in said Indenture. The amount of interest and fees payable from time to time under the Reimbursement Agreement, the basis on which such interest and fees are computed and the dates on which such interest and fees are payable are set forth in the Reimbursement Agreement. 20 16 Except as hereinafter provided, this Bond shall bear interest (a) from the interest payment date next preceding the date of this Bond to which interest has been paid, or (b) if the date of this Bond is an interest payment date to which interest has been paid, then from such date, or (c) if no interest has been paid on this Bond, then from the date of initial issue. This Bond is one of the duly authorized Bonds of the Company (herein called the "Bonds"), all issued and to be issued under and equally secured by a Mortgage and Deed of Trust dated July 1, 1940, executed by the Company to Guaranty Trust Company of New York as Trustee under which The Chase Manhattan Bank (National Association) is successor trustee (herein called the "Trustee"), and all indentures supplemental thereto (said Mortgage as so supplemented herein called the "Indenture") to which reference is hereby made for a description of the properties mortgaged and pledged, the nature and extent of the security, the rights of the registered owner or owners of the Bonds and of the Trustee in respect thereof, and the terms and conditions upon which the Bonds are, and are to be, secured. The Bonds may be issued in series, for various principal sums, may mature at different times, may bear interest at different rates and may otherwise vary as in the Indenture provided. This Bond is the only Bond of a series designated as the First Mortgage Bonds, Collateral Series B (herein called the "Bonds of Collateral Series B") limited, except as otherwise provided in the Indenture, in aggregate principal amount to $90,400,000, but the aggregate principal amount hereof outstanding at any time shall not exceed such lesser amount as is equal to 40% of the sum of (a) the Maximum Available Credit Amount from time to time of the Letters of Credit plus (b) the aggregate principal amount of Letter of Credit drawings and Advances outstanding from time to time under the Reimbursement Agreement minus (c) the amount, if any, of Cash Collateral, and is issued under and secured by the Indenture and described in the Seventy-First Supplemental Indenture dated June 1, 1995, between the Company and the Trustee (herein called the "Supplemental Indenture"). The Bonds of Collateral Series B have been issued by the Company to the Agent Bank (i) to provide for the payment of the Company's obligations to make payments to any person under the Reimbursement Agreement and (ii) to provide to such persons the benefits of the security provided for the Bonds of Collateral Series B. As used herein, the term "Agent Bank" shall refer to the bank designated in the Reimbursement Agreement as the party responsible for holding the Bonds of Collateral Series B as agent for the benefit of the Participating Banks 21 17 (as defined in the Reimbursement Agreement). The Bonds of Collateral Series B have been delivered to the Agent Bank as agent for the benefit of the Participating Banks. Any payment made in respect of the Company's obligations under the Reimbursement Agreement shall be deemed a payment in respect of the Bonds of Collateral Series B, but such payment shall not reduce the principal amount of the Bonds of Collateral Series B unless the sum of (a) the Maximum Available Credit Amount of the Letters of Credit plus (b) the aggregate principal amount of Letter of Credit drawings and Advances then outstanding under the Reimbursement Agreement is irrevocably reduced concurrently with such payment. In the event that all of the Company's obligations under the Reimbursement Agreement have been discharged, this Bond shall be deemed paid in full and shall be surrendered to the Trustee for cancellation. The Bonds of Collateral Series B are subject to redemption prior to maturity as provided in Section 9 of Article III of the Supplemental Indenture at a redemption price of 100% of the principal amount to be redeemed, any accrued and unpaid interest and all other amounts payable by the Company under the Reimbursement Agreement. To the extent permitted by and as provided in the Indenture, modifications or alterations of the Indenture, or of any indenture supplemental thereto, and of the rights and obligations of the Company and of the holders of the Bonds and coupons may be made with the consent of the Company by an affirmative vote of not less than 80% in principal amount of the Bonds entitled to vote then outstanding, at a meeting of Bondholders called and held as provided in the Indenture, and, in case one or more but less than all of the series of Bonds then outstanding under the Indenture are so affected, by an affirmative vote of not less than 80% in principal amount of the Bonds of any series entitled to vote then outstanding and affected by such modification or alteration; provided, however, that no such modification or alteration shall be made which will affect the terms of payment of the principal of or premium, if any, or interest on this Bond. In the Nineteenth Supplemental Indenture dated November 23, 1976 between the Company and the Trustee, the Company has modified the Indenture effective from and after the time when none of the Bonds of any series established prior to the execution of the Nineteenth Supplemental Indenture shall remain outstanding so as to change "80%" in the foregoing sentence to "60%" and to make certain other modifications of the Indenture and has reserved the right to make certain other modifications of the Indenture without any vote, consent or other action by the holders of Bonds of 22 18 any series established in the Nineteenth Supplemental Indenture or in any subsequent supplemental indenture. If an event of default, as defined in the Indenture, shall occur, the principal of all the Bonds at any such time outstanding under the Indenture may be declared or may become due and payable, upon the conditions and in the manner and with the effect provided in the Indenture. The Indenture provides that such declaration may in certain events be waived by the holders of a majority in principal amount of the Bonds outstanding. No recourse shall be had for the payment of the principal of or the interest or premium, if any, on this Bond, or for any claim based hereon or on the Indenture or any indenture supplemental thereto, against any incorporator, or against any stockholder, director or officer, past, present or future, of the Company, or of any predecessor or successor corporation, as such, either directly or through the Company or any such predecessor or successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability, whether at common law, in equity, by any constitution or statute or otherwise, of incorporators, stockholders, directors or officers being released by every owner hereof by the acceptance of this Bond and as part of the consideration for the issue hereof, and being likewise released by the terms of the Indenture. This Bond shall not be entitled to any benefit under the Indenture or any indenture supplemental thereto, or become valid or obligatory for any purpose, until the Trustee under the Indenture, or a successor trustee thereto under the Indenture, shall have signed the form of certificate of authentication endorsed hereon. IN WITNESS WHEREOF, The Cleveland Electric Illuminating Company has caused this Bond to be signed in its name by its President or a Vice President and its corporate seal to be hereto affixed and attested by its Secretary or an Assistant Secretary. 23 19 Dated: THE CLEVELAND ELECTRIC ILLUMINATING COMPANY By ...................................................... Vice President Attest: ........................... Secretary [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Bond is one of the Bonds of the series designated and described in the within-mentioned Indenture and Supplemental Indenture. THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) Trustee By....................................................... Authorized Officer [END OF FORM OF FULLY REGISTERED BOND OF COLLATERAL SERIES B] ARTICLE IV THE TRUSTEE SECTION 1. The Trustee hereby accepts the trusts hereby declared and provided upon the terms and conditions in the Indenture set forth and upon the terms and conditions set forth in this Article IV. SECTION 2. The Trustee shall not be responsible in any manner whatsoever for or in respect of the validity or sufficiency of this Supplemental Indenture or the due execution hereof by the Company or for or in respect of the recitals contained herein, all of which recitals are made by the Company solely. In general, each and every term and condition contained in Article XIII 24 20 of the Indenture shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate. SECTION 3. For purposes of this Supplemental Indenture (a) the Trustee may conclusively rely and shall be protected in acting upon the written demand from, or certificate of, the Revolver Agent Bank, the LC Agent Bank, or any officers' certificate or opinion of counsel, as to the truth of the statements and the correctness of the opinions expressed therein, without independent investigation or verification thereof, subject to Article XIII of the Indenture and (b) a written demand from, or certificate of, the Revolver Agent Bank or the LC Agent Bank shall mean a written demand or certificate executed by the president, any vice president or any authorized officer of the Revolver Agent Bank or the LC Agent Bank, respectively. ARTICLE V MISCELLANEOUS PROVISIONS This Supplemental Indenture may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original; but such counterparts shall together constitute but one and the same instrument. EXECUTION IN WITNESS WHEREOF, said The Cleveland Electric Illuminating Company has caused this Supplemental Indenture to be executed on its behalf by its President or one of its Vice Presidents and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by its Secretary or an Assistant Secretary, and said The Chase Manhattan Bank (National Association), in evidence of its acceptance of the trust hereby created, has caused this Supplemental Indenture to be executed on its behalf by one of its Vice Presidents or one of its Trust Officers and its corporate seal to be hereto affixed and said seal and this Supplemental Indenture to be attested by one of its Assistant Trust Officers or Assistant Secretaries, all as of the day and year first above written. 25 S-1 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY By G.R. LEIDICH Vice President Attest: J.T. PERCIO Secretary Signed, sealed and acknowledged by The Cleveland Electric Illuminating Company in the presence of PATRICIA BARKEY - ----------------------------------- Patricia A. Barkey SONDRA Y. CLARKE - ----------------------------------- Sondra Y. Clarke As witnesses [SEAL] 26 S-2 THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) By VALERIE DUNBAR Second Vice President Attest: SAM SCHWARTZMAN Assistant Secretary Signed, sealed and acknowledged by The Chase Manhattan Bank (National Association) In the presence of LYNN M. FITZPATRICK - ----------------------------------- Lynn M. Fitzpatrick DONNA FITZSIMMONS - ----------------------------------- Donna Fitzsimmons As witnesses [SEAL] 27 S-3 STATE OF OHIO ) COUNTY OF CUYAHOGA ) ss: On this day of June, 1995, before me personally appeared GARY R. LEIDICH and J. T. PERCIO to me personally known, who being by me severally duly sworn, did say that they are a Vice President and Secretary, respectively, of The Cleveland Electric Illuminating Company, that the seal affixed to the foregoing instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said corporation. SONDRA Y. CLARKE SONDRA Y. CLARKE Notary Public, State of Ohio Recorded in Cuyahoga Cty. My Comm. Expires [SEAL] November 25, 1998 28 S-4 STATE OF NEW YORK ) COUNTY OF NEW YORK ) ss: On this day of June, 1995, before me personally appeared VALERIE DUNBAR and SAM SCHWARTZMAN to me personally known, who being by me severally duly sworn, did say that they are a Second Vice President and Assistant Secretary, respectively, of The Chase Manhattan Bank (National Association), that the seal affixed to the foregoing instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said corporation. MARGARET M. PRICE Notary Public Notary Public, State of New York No. 24-4980599 Qualified in Kings County [SEAL] Commission Expires April 22, 1997 This instrument prepared by Kevin P. Murphy, attorney at law. 29 R-1 This page contains information as to recording and filing which was not set forth in this Supplemental Indenture at the time of execution. This page is not a part of this Supplemental Indenture. RECORDING AND FILING DATA This Supplemental Indenture was filed for record and recorded in the record of mortgages in the offices of the Recorders of the following Counties:
COUNTY VOLUME PAGE FILED FOR RECORD - ------------------------------- --------------- ----------------------------- Ohio Ashtabula 82 1934 June 29, 1995 Cuyahoga 95-05101 51 June 29, 1995 Erie 227 572 June 29, 1995 Geauga 1019 759 June 29, 1995 Lake 1131 311 June 29, 1995 Lorain 1104 759 June 29, 1995 Ottawa 456 871 June 29, 1995 Portage 35 51 June 29, 1995 Stark Instrument No. 95028581 June 29, 1995 Summit 1956 134 June 29, 1995 Trumbull 941 961 June 29, 1995 Pennsylvania Warren 612 258 June 29, 1995 Beaver 1374 722 June 29, 1995
An amendment to a previously filed financing statement and a counterpart of this Supplemental Indenture were filed in the office of the Secretary of the Commonwealth of Pennsylvania on June 29, 1995 under original file number 13451763, microfilm number 24430561, to comply with the filing requirements of the Pennsylvania enactment of the Uniform Commercial Code. EX-27.B 6 EXHIBIT 27.B
UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE RELATED FORM 10-Q FINANCIAL STATEMENT FOR THE CLEVELAND ELECTRIC ILLUMINATING COMPANY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENT. 0000020947 THE CLEVELAND ELECTRIC ILLUMINATING COMPANY 1,000 U.S. DOLLARS 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 1 PER-BOOK 4,867,983 243,633 528,204 1,446,331 0 7,086,151 1,241,249 78,624 (166,232) 1,153,641 215,420 240,871 2,709,897 0 0 0 124,060 39,514 96,547 52,354 2,453,847 7,086,151 1,360,578 81,592 957,688 1,039,280 321,298 25,110 346,408 185,218 161,190 32,127 129,063 44,606 233,385 312,426 0 0
EX-4.D 7 EXHIBIT 4.D 1 Exhibit 4(d) [CONFORMED] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE TOLEDO EDISON COMPANY TO THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), TRUSTEE. ------------------------ FORTY-SECOND SUPPLEMENTAL INDENTURE DATED AS OF MAY 1, 1995 ------------------------ (SUPPLEMENTAL TO INDENTURE DATED AS OF APRIL 1, 1947) ------------------------ FIRST MORTGAGE BONDS, 7 5/8% SERIES DUE 2020 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 TABLE OF CONTENTS
PAGE --------- PARTIES.................................................. 1 RECITALS................................................. 1 FORM OF BOND OF THIS SERIES.............................. 4 GRANTING CLAUSES......................................... 13 ARTICLE I CREATION AND DESCRIPTION OF BONDS OF THIS SERIES SECTION 1. Creation of Bonds of this Series, limit on amount issuable........................... 13 SECTION 2. Interest Rates, Computation and Payment Dates..................................... 13 SECTION 3. Place and coin of payment................... 13 SECTION 4. Denominations............................... 14 SECTION 5. Transfer and Exchange....................... 14 SECTION 6. Record date for payment of interest......... 14 SECTION 7. Date of Bonds of this Series................ 15 SECTION 8. Authentication of Bonds of this Series by Trustee................................ 15 ARTICLE II REDEMPTION OF BONDS OF THIS SERIES SECTION 1. Bonds of this Series redeemable............. 15 SECTION 2. Mandatory redemption provisions............. 16 SECTION 3. Certain provisions of Original Indenture applicable to redemption of Bonds of this Series.................................... 17 SECTION 4. Bondholder agrees to accept payment of Bonds of this Series redeemed prior to maturity.................................. 17
3 ii
PAGE --------- ARTICLE III PAYMENT DEEMED MADE OF BONDS OF THIS SERIES SECTION 1. Upon surrender of Authority Bonds purchased................................. 17 SECTION 2. Upon payment of Authority Bonds............. 18 SECTION 3. Surrender and cancellation of Bonds of this Series.................................... 18 ARTICLE IV THE TRUSTEE SECTION 1. The Trustee accepts trust created by Forty-second Supplemental Indenture....... 18 SECTION 2. Agency of the Company other than the Trustee................................... 19 SECTION 3. Trustee advises Company of notations provided for in Article III............... 19 ARTICLE V MISCELLANEOUS PROVISIONS SECTION 1. Ratification and approval of Original Indenture as supplemented................. 19 Covenants of Original Indenture, except as modified, continue in effect.............. 19 SECTION 2. Forty-second Supplemental Indenture may be executed in counterparts.................. 20 TESTIMONIUM CLAUSE....................................... 20 SIGNATURES AND SEALS..................................... S-1 ACKNOWLEDGMENTS.......................................... S-2 RECORDING AND FILING DATA................................ R-1
4 FORTY-SECOND SUPPLEMENTAL INDENTURE, dated as of May 1, 1995, between THE TOLEDO EDISON COMPANY, a corporation organized and existing under the laws of the State of Ohio (hereinafter called the "Company"), and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking association existing under the laws of the United States of America, with its head office at 1 Chase Manhattan Plaza, The City of New York (hereinafter called the "Trustee"), as Trustee. RECITALS The Company has heretofore executed and delivered an Indenture of Mortgage and Deed of Trust dated as of April 1, 1947 (hereinafter referred to as the "Original Indenture") to The Chase National Bank of the City of New York, predecessor Trustee, to secure an issue of First Mortgage Bonds of the Company, issuable in series, and created thereunder an initial series of bonds designated as First Mortgage Bonds, 2 7/8% Series due 1977, being the initial series of bonds issued under the Original Indenture; and The Company has heretofore executed and delivered to The Chase National Bank of the City of New York, predecessor Trustee, four Supplemental Indentures supplementing the Original Indenture dated, respectively, September 1, 1948, April 1, 1949, December 1, 1950 and March 1, 1954 and has heretofore executed and delivered to The Chase Manhattan Bank, which on March 31, 1955, became the Trustee under the Original Indenture by virtue of the merger of The Chase National Bank of the City of New York into President and Directors of The Manhattan Company under the name of The Chase Manhattan Bank, the Fifth and the Sixth Supplemental Indentures dated, respectively, February 1, 1956, and May 1, 1958, supplementing the Original Indenture; and The Chase Manhattan Bank was converted into a national banking association under the name The Chase Manhattan Bank (National Association), effective September 23, 1965; and by virtue of said conversion the continuity of the business of The Chase Manhattan Bank, including its business of acting as corporate trustee, and its corporate existence, have not been affected, so that The Chase Manhattan Bank (National Association) is vested with all the trusts, powers, discretion, immunities, privileges and all other matters as were vested in said The Chase Manhattan Bank under the Indenture, with like effect as if originally named as Trustee therein; and 5 2 The Company has heretofore executed and delivered to the Trustee 35 Supplemental Indentures dated, respectively, as follows: Seventh, August 1, 1967, Eighth, November 1, 1970, Ninth, August 1, 1972, Tenth, November 1, 1973, Eleventh, July 1, 1974, Twelfth, October 1, 1975, Thirteenth, June 1, 1976, Fourteenth, October 1, 1978, Fifteenth, September 1, 1979, Sixteenth, September 1, 1980, Seventeenth, October 1, 1980, Eighteenth, April 1, 1981, Nineteenth, November 1, 1981, Twentieth, June 1, 1982, Twenty-first, September 1, 1982, Twenty-second, April 1, 1983, Twenty-third, December 1, 1983, Twenty-fourth, April 1, 1984, Twenty-fifth, October 15, 1984, Twenty-sixth, October 15, 1984, Twenty-seventh, August 1, 1985, Twenty-eighth, August 1, 1985, Twenty-ninth, December 1, 1985, Thirtieth, March 1, 1986, Thirty-first, October 15, 1987, Thirty-second, September 15, 1988, Thirty-third, June 15, 1989, Thirty-fourth, October 15, 1989, Thirty-fifth, May 15, 1990, Thirty-sixth, March 1, 1991, Thirty-seventh, May 1, 1992, Thirty-eighth, August 1, 1992, Thirty-ninth, October 1, 1992, Fortieth, January 1, 1993 and Forty-first, September 15, 1994 supplementing the Original Indenture (The Original Indenture, all the aforementioned Supplemental Indentures, this Forty-second Supplemental Indenture and any other indentures supplemental to the Original Indenture are herein collectively called the "Indenture" and this Forty-second Supplemental Indenture is hereinafter called "this Supplemental Indenture"); and Pursuant to the provisions of the Indenture, the Company has issued 47 series of bonds in the aggregate principal amount of $2,017,800,000, of which 29 series (including the Bonds of the 1977 Series issued pursuant to the Original Indenture) in the aggregate principal amount of $1,145,800,000 are no longer outstanding and of which additional portions, aggregating $36,875,000 in principal amount, of 4 other series have been retired; and The Company covenanted in and by the Original Indenture to execute and deliver such further instruments and do such further acts as may be necessary or proper to carry out more effectually the purposes of the Original Indenture and to make subject to the lien thereof property acquired after the execution and delivery of the Original Indenture; and Under Article 3 of the Original Indenture, the Company is authorized to issue additional bonds upon the terms and conditions expressed in the Original Indenture; and The Company proposes to create one new series of First Mortgage Bonds to be designated as First Mortgage Bonds, 7 5/8% Series due 2020 (hereinafter 6 3 called the "Bonds of this Series"), with the denominations, rate of interest, date of maturity, redemption provisions and other provisions and agreements in respect thereof as in this Supplemental Indenture set forth; and The Bonds of this Series are to be issued by the Company and delivered to the Authority Trustee (hereinafter defined) to evidence and secure its obligation to pay to the Beaver County Industrial Development Authority (hereinafter called the "Authority") a portion of the Company's share of the purchase price for certain air and water pollution control facilities and sewage and solid waste disposal facilities used in connection with the operation of Beaver Valley Power Station Unit 2, a nuclear powered generating unit located in Shippingport, Pennsylvania (hereinafter called the "Project Facilities"), such portion being in an amount equal to the principal amount of the Authority Bonds (hereinafter defined) issued pursuant to the Beaver Valley Pollution Control Facilities Agreement dated as of April 1, 1974, among the Authority, the Company, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company and Pennsylvania Power Company; and That portion of the Company's share of the cost of the Project Facilities was originally financed with proceeds from the sale by the Authority of $45,000,000 principal amount of Beaver County Industrial Development Authority Pollution Control Revenue Bonds, 1984 Series A (The Toledo Edison Company Beaver Valley Project) (hereinafter called the "Prior Authority Bonds"). The Prior Authority Bonds are to be refunded from the proceeds of one series of Collateralized Pollution Control Revenue Refunding Bonds, Series 1995 (The Toledo Edison Company Beaver Valley Project) (hereinafter called the "Authority Bonds") to be issued pursuant to a Trust Indenture, dated as of May 1, 1995 (hereinafter called the "Authority Trust Indenture"), between the Authority and Society National Bank, as trustee, (hereinafter called the "Authority Trustee"), and the Bonds of this Series are to be assigned by the Authority to the Authority Trustee as security for the payment of the principal of and premium, if any, and interest on the Authority Bonds and are to be delivered by the Company on behalf of the Authority directly to, and registered in the name of, the Authority Trustee; and The Company, by appropriate corporate action, has duly resolved and determined to execute this Supplemental Indenture for the purpose of providing for the creation of the Bonds of this Series and of specifying the form, provisions and particulars thereof as in said Original Indenture, as amended, provided or permitted, including the issuance only of fully registered Bonds, 7 4 and of giving to the Bonds of this Series the protection and security of the Indenture; and The text of the Bonds of this Series is to be substantially in the form following: [FORM OF BOND OF THIS SERIES] THE TOLEDO EDISON COMPANY FIRST MORTGAGE BOND, 7 5/8% SERIES DUE 2020 DUE MAY 1, 2020 No. OA- $ THE TOLEDO EDISON COMPANY, an Ohio corporation (hereinafter called the Company), for value received, hereby promises to pay to , or registered assigns, the principal sum of Dollars or the aggregate unpaid principal amount hereof (as shown on the Schedule of Payments hereon), whichever is less, on May 1, 2020, at its office or agency in The City of New York, or, so long as the registered owner of this Bond is the Authority Trustee (hereinafter defined), at the agency of the Company in the City of Cleveland, State of Ohio, and semiannually on the same dates as interest is payable on the Authority Bonds (hereinafter defined; each such date hereinafter called an interest payment date) and to pay interest on the unpaid principal amount hereof to the registered owner hereof at said office or agencies at the rate per annum specified in the title of this Bond, until maturity, or, if this Bond shall be duly called for redemption, until the redemption date, or, if the Company shall default in the payment of the principal amount of this Bond, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the Indenture (hereinafter defined). Except as hereinafter provided, this Bond shall bear interest from the interest payment date next preceding the date of this Bond to which interest has been paid, unless this Bond is dated on an interest payment date, in which case from the date hereof; or unless this Bond is dated prior to the first interest payment date in respect hereof, in which case from May 1, 1995, and except that if this Bond is delivered on a transfer or exchange of or in substitution for one or more Bonds of this Series (hereinafter defined) it shall bear interest from the last preceding date to which interest shall have been paid on the Bond or Bonds of this Series in respect of which this Bond is delivered (except that if this Bond is dated between the record date (hereinafter defined) for any interest payment date and such interest payment date, then from such interest 8 5 payment date; provided, however, that if the Company shall default in the payment of interest due on such interest payment date, then from the next preceding interest payment date to which interest has been paid on the Bonds of this Series, or if such interest payment date is the first interest payment date for Bonds of this Series, then from May 1, 1995). The interest so payable on any interest payment date will, subject to certain exceptions provided in the Indenture, be paid to the person in whose name this Bond is registered at the close of business on the record date, which shall be the "Regular Record Date" as defined in the Authority Trust Indenture (hereinafter defined), applicable to the regular interest payment date of any Bond of this Series, if it were an "Interest Payment Date" as defined in the Authority Trust Indenture. Both the principal of and the interest on this Bond shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Bond is one of the Bonds of the Company, known as its First Mortgage Bonds, issued and to be issued in one or more series under and equally and ratably secured (except as any sinking, amortization, improvement or other fund, established in accordance with the provisions of the Indenture, may afford additional security for the Bonds of any particular series) by a certain Indenture of Mortgage and Deed of Trust, dated as of April 1, 1947 (hereinafter called the Original Indenture), made by the Company to The Chase National Bank of the City of New York (The Chase Manhattan Bank (National Association), successor), as Trustee (hereinafter called the Trustee), and by certain indentures supplemental thereto, including the Forty-second Supplemental Indenture dated as of May 1, 1995 (the Original Indenture and said indentures supplemental thereto herein collectively called the Indenture and said Forty-second Supplemental Indenture hereinafter called the Supplemental Indenture), to which Indenture reference is hereby made for a description of the property mortgaged, the nature and extent of the security, the rights and limitations of rights of the Company, the Trustee and the holders of said Bonds and of the coupons appurtenant to coupon Bonds under the Indenture and the terms and conditions upon which said Bonds are and are to be issued and secured, to all of the provisions of which Indenture and of all such supplemental indentures in respect of such security, including the provisions of the Indenture permitting the issue of Bonds of any series for property which, under the restrictions and limitations therein specified, may be subject to liens prior to the lien of the Indenture, the holder, by accepting this Bond, assents. To the extent permitted by and as provided in the Indenture, the rights and obligations of the Company and of the holders of said Bonds and 9 6 coupons (including those pertaining to any sinking or other fund) may be changed and modified, with the consent of the Company, by the holders of at least 75% in aggregate principal amount of the Bonds then outstanding, such percentage being determined as provided in the Indenture; provided, however, that in case such changes and modifications affect one or more but less than all series of Bonds then outstanding, they shall be required to be adopted only by the affirmative vote of the holders of at least 75% in aggregate principal amount of outstanding Bonds of such one or more series so affected; and further provided, that without the consent of the holder hereof no such change or modification shall be made which will extend the time of payment of the principal of, or of the interest or premium, if any, on this Bond or reduce the principal amount hereof or the rate of interest or the premium, if any, hereon, or affect any other modification of the terms of payment of such principal or interest, or premium, if any, or will permit the creation of any lien ranking prior to or on a parity with the lien of the Indenture on any of the mortgaged property, or will deprive the holder hereof of the benefit of a lien upon the mortgaged property for the security of this Bond, or will reduce the percentage of Bonds required for the adoption of changes or modifications as aforesaid. This Bond is one of a series of Bonds designated as the First Mortgage Bonds, 7 5/8% Series due 2020, of the Company (herein called Bonds of this Series) limited, except as otherwise provided in the Indenture, in aggregate principal amount to $45,000,000 and issued under and secured by the Supplemental Indenture. The Bonds of this Series have been issued by the Company and delivered to the Authority Trustee to evidence and secure its obligation to pay to the Beaver County Industrial Development Authority (hereinafter called the Authority) a portion of the Company's share of the purchase price for certain air and water pollution control facilities and sewage and solid waste disposal facilities used in connection with the operation of Beaver Valley Power Station Unit 2, a nuclear powered generating unit located in Shippingport, Pennsylvania (hereinafter called the Project Facilities), such portion being in an amount equal to the principal of the Authority Bonds issued pursuant to the Beaver Valley Pollution Control Facilities Agreement dated as of April 1, 1974, among the Authority, the Company, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company and Pennsylvania Power Company. That portion of the Company's share of the cost of the Project Facilities was originally financed with proceeds from the sale by the Authority of certain bonds, which were refunded from the proceeds of one series of Collateralized Pollution Control Revenue Refunding Bonds, Series 1995 (The Toledo Edison Company Beaver Valley Project) (herein called the 10 7 Authority Bonds) issued pursuant to a Trust Indenture, dated as of May 1, 1995 (herein called the Authority Trust Indenture), between the Authority and Society National Bank, as trustee, (herein called the Authority Trustee). The Bonds of this Series have been assigned by the Authority to the Authority Trustee as security for the payment of the principal of and premium, if any, and interest on the Authority Bonds and have been delivered by the Company on behalf of the Authority directly to, and registered in the name of, the Authority Trustee. In the event any Authority Bonds shall be surrendered to the Authority Trustee or other person for cancellation pursuant to the Authority Trust Indenture (except upon exchange for other Authority Bonds), Bonds of this Series equal in principal amount to such Authority Bonds shall be deemed to have been paid, but only when and to the extent (a) so noted on the Schedule of Payments hereon by one of the agencies of the Company hereinabove specified and (if such agency is not the Trustee) written notice by such agency of such notation has been received by the Trustee or (b) such Bond is surrendered to and cancelled by the Trustee as provided in the next paragraph; and in the event and to the extent the principal of (or premium, if any) or interest on any Authority Bonds shall be paid or deemed to be paid, an equal amount of principal (or premium, if any) or interest, as the case may be, payable with respect to an aggregate principal amount of Bonds of this Series equal to the aggregate principal amount of such Authority Bonds shall be deemed to have been paid, but, in the case of such payment of principal, only when and to the extent (i) so noted on the Schedule of Payments hereon by one of the agencies of the Company hereinabove specified and (if such agency is not the Trustee) written notice by such agency of such notation has been received by the Trustee or (ii) this Bond is surrendered to and cancelled by the Trustee as provided in the next paragraph. When any such payment of principal of this Bond is made, this Bond shall be surrendered by the registered owner hereof to an agency of the Company for such notation and notification or to the Trustee for cancellation. In the event that this Bond shall be deemed to have been paid in full, this Bond shall be surrendered to the Trustee for cancellation. In the event that this Bond shall be deemed to have been paid in part, this Bond may, at the option of the registered owner, be surrendered to the Trustee for cancellation, in which event the Trustee shall cancel this Bond and the Company shall execute and the Trustee shall authenticate and deliver Bonds of this Series in autho- 11 8 rized denominations in aggregate principal amount equal to the unpaid balance of the principal amount of this Bond. The Bonds of this Series are subject to mandatory redemption by the Company prior to maturity, upon not less than thirty days prior notice, in whole or in part at any time, all as more fully provided in Section 1 of Article II of the Supplemental Indenture, in the event the Company exercises its option to direct the redemption of Authority Bonds pursuant to Section 4.01(a) of the Authority Trust Indenture, and an equivalent principal amount of Authority Bonds are being concurrently called for redemption, at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date fixed for redemption. The Bonds of this Series are also subject to mandatory redemption by the Company prior to maturity at any time (a) in whole upon notice of the occurrence of an event of default under the Authority Trust Indenture and of the acceleration of the payment of the principal of the Authority Bonds or (b) in whole or in part upon a final determination by any federal judicial or administrative authority that interest on the Authority Bonds is includable for federal income tax purposes in the gross income of the holders of the Authority Bonds (other than because a holder is a "substantial user" of the Project Facilities or a "related person" thereof, as those terms are used in Section 147(a) of the Internal Revenue Code of 1986, as amended) and an equivalent amount of Authority Bonds are being concurrently called for redemption, in each case as provided in Section 2 of Article II of the Supplemental Indenture, at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date fixed for redemption. The Bonds of this Series are also subject to mandatory redemption by the Company prior to stated maturity, all as more fully provided in Section 1 of Article II of the Supplemental Indenture, in whole or in part, on any date on or after May 1, 2005, in the event that and to the extent that the Company exercises its option to direct the redemption of Authority Bonds pursuant to the Authority Trust Indenture, and an equivalent principal amount of Authority 12 9 Bonds are being concurrently called for redemption, at redemption prices, plus accrued and unpaid interest if any, to the redemption date as follows:
REDEMPTION PRICE (EXPRESSED AS A PERCENTAGE REDEMPTION PERIODS OF THE PRINCIPAL AMOUNT (DATES INCLUSIVE) BEING REDEEMED) ---------------------------------------------------------------- May 1, 2005 through April 30, 2006 102 % May 1, 2006 through April 30, 2007 101 May 1, 2007 and thereafter 100
Any redemption of the Bonds of this Series shall be made in accordance with the applicable provisions of Sections 5.02, 5.03, 5.04 and 5.05 of the Original Indenture, unless and to the extent waived in writing by the registered owner or owners of all Bonds of this Series and such waiver is filed with the Trustee. If this Bond shall be called for redemption and payment of the redemption price shall be duly provided by the Company as specified in the Indenture, interest shall cease to accrue hereon from and after the date of redemption fixed in the notice thereof. The principal of this Bond may be declared or may become due before the maturity hereof, on the conditions, in the manner and at the times set forth in the Indenture, upon the happening of a default as therein defined. This Bond is transferable by the registered owner hereof in person or by his or her duly authorized attorney at the office or agency of the Company in The City of New York, upon surrender and cancellation of this Bond, and thereupon a new fully registered Bond or Bonds of this Series and maturity, for the same aggregate principal amount, in authorized denominations, will be issued to the transferee in exchange therefor, as provided in the Indenture. The Company and the Trustee and any paying agent may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment and for all other purposes. This Bond, alone or with other Bonds of this Series and maturity, may in like manner be exchanged at such office or agency for one or more new fully registered Bonds of this Series and maturity, in authorized denominations, of the same aggregate principal amount. Upon each such transfer, exchange and re-exchange, the Company will not require the payment of any charges, other than for any tax or other governmental charge required to be paid by the Company in connection therewith. In the event less than all of the Bonds of this Series at the time 13 10 outstanding are called for redemption, the Company shall not be required (a) to register any transfer or make any exchange of any such Bond for a period of 15 days before the mailing of the notice of redemption of any such Bond, (b) to register any transfer or make any exchange of any such Bond so called for redemption in its entirety, or (c) to register any transfer or make any exchange of any portion of any such Bond so called for redemption. No recourse under or upon any covenant or obligation of the Indenture, or of any indenture supplemental thereto, or of this Bond, for the payment of the principal of or the interest on this Bond, or for any claim based thereon, or otherwise in any manner in respect thereof, shall be had against any incorporator, subscriber to the capital stock, stockholder, officer or director, as such, of the Company, whether former, present or future, either directly, or indirectly through the Company or any predecessor or successor corporation or the Trustee, by the enforcement of any subscription to capital stock, assessment or otherwise, or by any legal or equitable proceeding by virtue of any constitution, statute, or otherwise (including, without limiting the generality of the foregoing, any proceeding to enforce any claimed liability of stockholders of the Company based upon any theory of disregarding the corporate entity of the Company or upon any theory that the Company was acting as the agent or instrumentality of the stockholders), any and all such liability of incorporators, stockholders, subscribers, officers and directors, as such, being released by the holder hereof, by the acceptance of this Bond, and being likewise waived and released by the terms of the Indenture. This Bond shall not be valid or become obligatory for any purpose until the certificate of authentication endorsed hereon shall have been signed by The Chase Manhattan Bank (National Association) or its successor, as Trustee under the Indenture. 14 11 IN WITNESS WHEREOF, THE TOLEDO EDISON COMPANY has caused this Bond to be signed in its name by its President or a Vice-President, manually or in facsimile, and its corporate seal to be impressed or imprinted hereon and attested by a manual or facsimile signature of its Secretary or an Assistant Secretary. Dated THE TOLEDO EDISON COMPANY By Vice President. Attest: Secretary. 15 12 [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Bond is one of the Bonds of the series designated herein, described in the within-mentioned Indenture. THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), AS TRUSTEE By Authorized Officer. [FORM OF SCHEDULE OF PAYMENTS] SCHEDULE OF PAYMENTS
AGENCY OF THE UNPAID COMPANY PRINCIPAL PRINCIPAL PREMIUM INTEREST MAKING AUTHORIZED DATE PAYMENT AMOUNT PAYMENT PAYMENT NOTATION OFFICER TITLE - ------------ ---------- ---------- -------- --------- ---------- ----------- ------
[END OF FORM OF BOND OF THIS SERIES] 16 13 All conditions and requirements necessary to make this Supplemental Indenture a valid, legal and binding instrument in accordance with its terms and to make the Bonds of this Series, when duly executed by the Company and authenticated and delivered by the Trustee, and duly issued, the valid, binding and legal obligations of the Company, have been done and performed, and the execution and delivery of this Supplemental Indenture have been in all respects duly authorized; NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That The Toledo Edison Company, the Company herein named, in consideration of the premises and of One Dollar ($1.00) to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, does hereby covenant and agree to and with the Trustee and its successors in the trust under the Indenture, for the benefit of those who shall hold the bonds to be issued hereunder and thereunder, as hereinafter provided, as follows: ARTICLE I CREATION AND DESCRIPTION OF BONDS OF THIS SERIES SECTION 1. A new series of bonds to be issued under and secured by the Indenture is hereby created, to be designated as First Mortgage Bonds, 7 5/8% Series due 2020 (such bonds herein referred to as the "Bonds of this Series"). The Bonds of this Series shall be limited to an aggregate principal amount of $45,000,000, excluding any Bonds of this Series which may be authenticated in exchange for or in lieu of or in substitution for or on transfer of other Bonds of this Series pursuant to any provisions of the Original Indenture or of this Supplemental Indenture. The Bonds of this Series shall be substantially in the form hereinbefore recited. SECTION 2. All Bonds of this Series shall mature May 1, 2020 and shall bear interest from May 1, 1995 at the rate of 7 5/8% per annum payable semiannually on the same dates as interest is payable on the Authority Bonds. SECTION 3. Both principal and interest shall be payable, so long as the registered owner of the Bonds of this Series is the Authority Trustee, at the agency of the Company in the City of Cleveland, State of Ohio, but if and when the registered owner of the Bonds of this Series is not the Authority Trustee, shall be payable at the office or agency of the Company in The City of New York; and both principal and interest shall be payable in any coin or 17 14 currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 4. The Bonds of this Series shall be issued only as fully registered Bonds in denominations of $100,000 and any integral multiple thereof. SECTION 5. Bonds of this Series shall be transferable and exchangeable for other Bonds of the same series at the office or agency of the Company in The City of New York, in the manner and upon the terms set forth in sec. 2.05 of the Original Indenture, but notwithstanding the provisions of sec. 2.08 of the Original Indenture, no charge shall be made upon any transfer or exchange of Bonds of said series other than for any tax or taxes or other governmental charge required to be paid by the Company. In the event less than all of the Bonds of this Series at the time outstanding are called for redemption, the Company shall not be required (a) to register any transfer or make any exchange of any such Bond for a period of 15 days before the mailing of the notice of redemption of any such Bond, (b) to register any transfer or make any exchange of any such Bond so called for redemption in its entirety, or (c) to register any transfer or make any exchange of any portion of any such Bond so called for redemption. SECTION 6. The person in whose name any Bond of this Series is registered at the close of business on any record date (as defined in the text of the Form of Bond of this Series set forth in this Supplemental Indenture) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such registered Bond upon any transfer or exchange thereof subsequent to the record date and prior to such interest payment date, except if and to the extent the Company shall default in the payment of the interest due on such interest payment date, in which case such defaulted interest shall be paid to the person in whose name such Bond (or any Bond or Bonds of this Series issued, directly or after intermediate transactions, upon transfer or exchange or in substitution thereof) is registered on the date of payment of such defaulted interest or on a subsequent record date for such payment if one shall have been established as hereinafter provided. A subsequent record date may be established by the Company by notice mailed to the holders of Bonds of this Series not less than 10 days preceding such record date, which record date shall be not more than 15 days prior to the subsequent interest payment date. 18 15 SECTION 7. Except as provided in this Article I, every Bond of this Series shall be dated and shall bear interest as provided in sec. 2.04 of the Original Indenture; provided, however, that, so long as there is no existing default in the payment of interest on said Bonds, the holder of any Bond of this Series authenticated by the Trustee between the record date for any interest payment date and such interest payment date shall not be entitled to the payment of the interest due on such interest payment date and shall have no claim against the Company with respect thereto; provided, further, that, if and to the extent the Company shall default in the payment of the interest due on such interest payment date, then any such Bond shall bear interest from the interest payment date next preceding the date of such Bond to which interest has been paid or, if the Company shall be in default with respect to the interest due on the first interest payment date of such Bond, then from May 1, 1995. SECTION 8. The Bonds of this Series may be executed by the Company and delivered to the Trustee and, upon compliance with all applicable provisions and requirements of the Original Indenture in respect thereof, shall be authenticated by the Trustee and delivered (without awaiting the filing or recording of this Supplemental Indenture) in accordance with the written order or orders of the Company. ARTICLE II REDEMPTION OF BONDS OF THIS SERIES SECTION 1. The Bonds of this Series shall, in the manner provided in Article 5 of the Original Indenture, be subject to redemption by the Company prior to maturity, as follows: (a) In the event the Company exercises its option to direct the redemption of Authority Bonds upon the occurrence of any of the events described in Section 4.01(a) of the Authority Trust Indenture, in whole or in part, in each case at a redemption price of 100% of the principal amount, plus accrued interest to the date fixed for redemption; or (b) In whole or in part on any date on or after May 1, 2005, in the event that and to the extent that the Company exercises its option to direct the redemption of Authority Bonds pursuant to Section 4.01(c) of the Authority Trust Indenture, at redemption prices equal to the following percentages of the principal amount to be redeemed, plus accrued interest to the date fixed for redemption: 19 16
REDEMPTION PRICE (EXPRESSED AS A PERCENTAGE REDEMPTION PERIODS OF THE PRINCIPAL AMOUNT (DATES INCLUSIVE) BEING REDEEMED) ---------------------------------------------------------------- May 1, 2005 through April 30, 2006....... 102 % May 1, 2006 through April 30, 2007....... 101 May 1, 2007 and thereafter............... 100
Any redemption under this Section 1 shall occur only upon receipt by the Trustee of a certificate of the Company to the effect that (i) the Company has given notice to the Authority Trustee that the Company is exercising its option to direct redemption of Authority Bonds as provided in Section 4.01(a) or 4.01(c) of the Authority Trust Indenture and (ii) an equivalent principal amount of Authority Bonds are being currently called for redemption. Such certificate shall specify the principal amount of the Bonds of this Series to be redeemed, shall have attached to it a copy of said notice to the Authority Trustee and shall specify the redemption date of such Bonds of this Series, which redemption date shall not be less than forty-five (45) days from the date of the Trustee's receipt of such certificate and shall be the same as the redemption date specified in the attached notice for the Authority Bonds being concurrently redeemed. SECTION 2.(a) The Bonds of this Series shall be subject to mandatory redemption by the Company in whole at any time prior to maturity if the Trustee shall receive a written demand from the Authority Trustee for redemption of all Bonds of this Series held by the Authority Trustee, stating that an "event of default" under the Authority Trust Indenture has occurred and is continuing and that payment of the principal of the Authority Bonds has been accelerated; provided, however, that the Bonds of this Series shall not be redeemed under this Section 2(a) in the event that prior to the date fixed for redemption: (i) the Trustee shall have received a certificate of the Authority Trustee (a) stating that there has been a waiver of such acceleration or (b) withdrawing said written demand, or (ii) if an event of default under Section 9.01 of Article 9 of the Original Indenture shall have occurred and be continuing, there has been an acceleration of the principal of the Bonds of this Series. Any such redemption shall be made on a date selected by the Company not more than 45 days after receipt of the written demand at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date fixed for redemption. 20 17 (b) The Bonds of this Series shall also be subject to special mandatory redemption by the Company in whole or in part at any time at a redemption price of 100% of the principal amount thereof, plus accrued interest to the date fixed for redemption, at the earliest practicable date selected by the Authority Trustee, after consultation with the Company, but in any event no later than 180 days following the Authority Trustee's notification of a Determination of Taxability (as defined in the Authority Trust Indenture). Any special mandatory redemption hereunder shall be made only upon receipt by the Trustee of a certificate of the Company to the effect that the Company is delivering moneys to redeem Bonds of this Series in order to provide the Authority Trustee with the moneys needed to redeem Authority Bonds in accordance with Section 4.01(b) of the Authority Trust Indenture. Such certificate shall specify the principal amount of Authority Bonds to be redeemed and the redemption date of the Bonds of this Series, which date shall be the same as the redemption date for the Authority Bonds being concurrently redeemed. SECTION 3. The provisions of sec.5.02, sec.5.03, sec.5.04 and sec.5.05 of the Original Indenture shall be applicable to Bonds of this Series, provided that upon deposit with the Trustee of money to redeem Bonds of this Series, such money shall be immediately available for payment. SECTION 4. The holder of each and every Bond of this Series issued hereunder hereby agrees to accept payment thereof prior to maturity on the terms and conditions provided for in this Article II. ARTICLE III PAYMENT DEEMED MADE OF BONDS OF THIS SERIES SECTION 1. In the event any Authority Bonds shall be purchased by the Company and surrendered by it to the Authority Trustee for cancellation or shall be otherwise surrendered to the Authority Trustee for cancellation pursuant to the Authority Trust Indenture (except upon exchange for other Authority Bonds), Bonds of this Series equal in principal amount and maturity to the Authority Bonds so surrendered shall be deemed to have been paid, but only when and to the extent that (a) such payment of the principal amount of such Bonds of this Series shall be noted by an agency of the Company on the Schedule of Payments on such Bonds of this Series and (if such agency is not the Trustee) written notice by such agency of such notation shall have been received by the Trustee or (b) such Bonds of this Series shall have been 21 18 surrendered to and cancelled by the Trustee as provided in Section 3 of this Article III. SECTION 2. In the event and to the extent the principal of or premium, if any, or interest on any Authority Bonds shall be paid out of funds held by the Authority Trustee or out of any other funds or shall otherwise be deemed to be paid, an equal amount of principal of or premium, if any, or interest on, as the case may be, Bonds of this Series shall be deemed to have been paid, but in the case of such payments of principal on such Bonds of this Series, only when and to the extent that (a) such payment of the principal amount of such Bonds of this Series shall be noted by an agency of the Company on the Schedule of Payments on such Bonds of this Series and (if such agency is not the Trustee) written notice by such agency of such notation shall have been received by the Trustee or (b) such Bonds of this Series shall have been surrendered to and cancelled by the Trustee as provided in Section 3 of this Article III. SECTION 3. When payment of any principal amount of a Bond of this Series shall be deemed to have been made as provided in Section 1 or 2 of this Article III, the registered owner thereof shall surrender such Bond to an agency of the Company for notation and notification or to the Trustee for cancellation as provided in said Section. All Bonds of this Series which shall be deemed to have been paid in full as provided in said Section 1 or 2 shall be surrendered to the Trustee for cancellation and the Trustee shall forthwith cancel the same. In the event that part of a Bond of this Series shall be deemed to have been paid as provided in said Section 1 or 2, the registered owner may at its option surrender such Bond to the Trustee for cancellation, in which event the Trustee shall cancel such Bond and the Company shall execute and the Trustee shall authenticate and deliver, without charge to the registered owner, Bonds of this Series in such authorized denominations as shall be specified by the registered owner in an aggregate principal amount equal to the unpaid balance of the principal amount of such surrendered Bond. ARTICLE IV THE TRUSTEE SECTION 1. The Trustee accepts the trusts created by this Supplemental Indenture upon the terms and conditions in the Original Indenture and in this Supplemental Indenture set forth. The recitals in this Supplemental Indenture are made by the Company only and not by the Trustee. Each and every term and condition contained in Article 13 of the Original Indenture shall apply to 22 19 this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture. SECTION 2. The Company shall cause any agency of the Company, other than the Trustee, which it may appoint from time to time to act as such agency in respect of the Bonds of this Series, to execute and deliver to the Trustee an instrument in which such agency shall: (a) Agree to keep and maintain, and furnish to the Trustee from time to time as reasonably requested by the Trustee, appropriate records of all transactions carried out by it as such agency and to furnish the Trustee such other information and reports as the Trustee may reasonably require; and (b) Certify that it is eligible for appointment as such agency and agree to notify the Trustee promptly if it shall cease to be so eligible; provided, however, that the Company, in lieu of causing any such agency to furnish such an instrument, may make such other arrangements with the Trustee in respect of any such agency as shall be satisfactory to the Trustee. SECTION 3. The Trustee shall advise the Company, promptly, in writing of the notation or receipt of written notice of notation on or cancellation of any Bond of this Series provided for in Article III of this Supplemental Indenture. ARTICLE V MISCELLANEOUS PROVISIONS SECTION 1. The Original Indenture, as heretofore supplemented, is in all respects ratified and confirmed, and the Original Indenture, this Supplemental Indenture and all other indentures supplemental to the Original Indenture shall be read, taken and construed as one and the same instrument. Neither the execution of this Supplemental Indenture nor anything herein contained shall be construed to impair the lien of the Indenture on any of the property subject thereto, and such lien shall remain in full force and effect as security for all bonds now outstanding or hereafter issued under the Indenture. All covenants and provisions of the Original Indenture, except as modified by this Supplemental Indenture and all other indentures supplemental to the Original Indenture, shall continue in full force and effect for the respective periods of 23 20 time therein specified, and this Supplemental Indenture shall form part of the Indenture. All terms defined in Article 1 of the Original Indenture shall, for all purposes of this Supplemental Indenture, have the meanings in said Article 1 specified, except as modified by this Supplemental Indenture and all other indentures supplemental to the Original Indenture and unless the context otherwise requires. SECTION 2. This Supplemental Indenture may be simultaneously executed in any number of counterparts, and all said counterparts executed and delivered, each as an original, shall constitute but one and the same instrument. IN WITNESS WHEREOF, The Toledo Edison Company has caused its corporate name to be hereunto affixed, this instrument to be signed by its President or a Vice President and its corporate seal to be hereunto affixed and attested by its Secretary or an Assistant Secretary for and in its behalf and The Chase Manhattan Bank (National Association), as Trustee, in evidence of its acceptance of the trust hereby created, has caused its corporate name to be hereunto affixed, this instrument to be signed by its President or a Vice President and its corporate seal to be hereunto affixed and attested by its Secretary, an Assistant Secretary or a Corporate Trust Officer, for and in its behalf, all as of the day and year first above written. 24 S-1 THE TOLEDO EDISON COMPANY BY TERRENCE G. LINNERT Vice President Attest: J. T. PERCIO [SEAL] Secretary Signed, sealed and acknowledged on behalf of The Toledo Edison Company in the presence of PATRICIA BARKEY Patricia Barkey SONDRA CLARKE Sondra Clarke As witnesses THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Trustee, By VALERIE DUNBAR Second Vice President Attest: BROOKS VON ARX, JR. [SEAL] Corporate Trust Officer Signed, sealed and acknowledged on behalf of The Chase Manhattan Bank (National Association) in the presence of R. J. HALLERAN Ronald J. Halleran L. M. FITZPATRICK Lynn M. Fitzpatrick As witnesses 25 S-2 STATE OF OHIO ) COUNTY OF CUYAHOGA ) ss: On this 5th day of May, 1995, before me personally appeared TERRENCE G. LINNERT and J. T. PERCIO to me personally known, who being by me severally duly sworn, did say that they are a Vice President and the Secretary, respectively, of The Toledo Edison Company, that the seal affixed to the foregoing instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said corporation. AMY B. MCCABE Notary Public Amy B. McCabe Notary Public, State of Ohio Recorded in Cuyahoga County My commission expires October 23, 1999 [SEAL] STATE OF NEW YORK ) COUNTY OF NEW YORK ) ss: On this 8th day of May, 1995, before me personally appeared VALERIE DUNBAR and BROOKS VON ARX, JR. to me personally known, who being by me severally duly sworn, did say that they are a Second Vice President and a Corporate Trust Officer, respectively, of The Chase Manhattan Bank (National Association), that the seal affixed to the foregoing instrument is the corporate seal of said association and that said instrument was signed and sealed in behalf of said association by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said association. MARGARET M. PRICE Notary Public Margaret M. Price Notary Public, State of New York No. 24-4980599 Qualified in Kings County Commission Expires April 22, 1997 [SEAL] THIS INSTRUMENT PREPARED BY BRUCE T. ROSENBAUM, ATTORNEY AT LAW. 26 R-1 This page contains information as to recording and filing which was not set forth in this Supplemental Indenture at the time of execution. This page is not a part of this Supplemental Indenture. RECORDING AND FILING DATA This Supplemental Indenture was filed for record and recorded in the record of mortgages in the offices of the Recorders of the following Counties:
FILED FOR COUNTY VOLUME PAGE(S) RECORD - ------------------------- ---------- ------------ --------------------- Ohio Belmont................ 636 252 May 12, 1995 Defiance............... 322 1054 May 12, 1995 Erie................... 221 180 May 11, 1995 Fulton................. 327 547 May 11, 1995 Henry.................. 209 39 May 11, 1995 Lake................... 1115 759 May 12, 1995 Lorain................. 1081 63 May 12, 1995 Monroe................. 13 128 May 12, 1995 Ottawa................. 454 13 May 11, 1995 Paulding............... 291 124 May 12, 1995 Putnam................. 574 183 May 12, 1995 Sandusky............... 477 964 May 12, 1995 Seneca................. 510 751 May 12, 1995 Williams............... 348 618 May 12, 1995 Wood................... 1008 985 May 12, 1995 Pennsylvania Beaver................. 1367 585 May 12, 1995
MICROFICHE ------------------------------ Lucas, Ohio.......... 95-885B08 May 12, 1995
An amendment to a previously filed financing statement and a counterpart of this Supplemental Indenture were filed in the office of the Secretary of the Commonwealth of Pennsylvania on May 12, 1995 under original or amendment file number 07851362, microfilm number 24280157, to comply with the filing requirements of the Pennsylvania enactment of the Uniform Commercial Code. EX-4.E 8 EXHIBIT 4.E 1 Exhibit 4(e) [CONFORMED] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE TOLEDO EDISON COMPANY TO THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), TRUSTEE. ------------------------ FORTY-THIRD SUPPLEMENTAL INDENTURE DATED AS OF JUNE 1, 1995 ------------------------ (SUPPLEMENTAL TO INDENTURE DATED AS OF APRIL 1, 1947) ------------------------ FIRST MORTGAGE BONDS, COLLATERAL SERIES C FIRST MORTGAGE BONDS, COLLATERAL SERIES D - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 TABLE OF CONTENTS
PAGE --------- PARTIES.................................................. 1 RECITALS................................................. 1 FORM OF BOND OF THE 49TH SERIES.......................... 4 FORM OF BOND OF THE 50TH SERIES.......................... 9 GRANTING CLAUSES......................................... 14 ARTICLE I CREATION AND DESCRIPTION OF BONDS OF THE 49TH SERIES SECTION 1. Creation of Bonds of the 49th Series, limit on amount issuable........................ 14 SECTION 2. Interest Rate, Computation and Payment Dates..................................... 15 SECTION 3. Place and coin of payment................... 15 SECTION 4. Denomination................................ 15 SECTION 5. Transfer of Bonds of the 49th Series........ 15 SECTION 6. Registration of Bonds of the 49th Series.... 16 SECTION 7. Payments on Bonds of the 49th Series........ 16 SECTION 8. Authentication of Bonds of the 49th Series by Trustee................................ 16 SECTION 9. Redemption of Bonds of the 49th Series...... 16
3 ii
PAGE --------- ARTICLE II CREATION AND DESCRIPTION OF BONDS OF THE 50TH SERIES SECTION 1. Creation of Bonds of the 50th Series, limit on amount issuable........................ 17 SECTION 2. Interest Rate, Computation and Payment Dates..................................... 17 SECTION 3. Place and coin of payment................... 18 SECTION 4. Denomination................................ 18 SECTION 5. Transfer of Bonds of the 50th Series........ 18 SECTION 6. Registration of Bonds of the 50th Series.... 18 SECTION 7. Payments on Bonds of the 50th Series........ 18 SECTION 8. Authentication of Bonds of the 50th Series by Trustee................................ 18 SECTION 9. Redemption of Bonds of the 50th Series...... 19 ARTICLE III THE TRUSTEE The Trustee accepts trust created by Forty-third Supplemental Indenture................................. 19 ARTICLE IV MISCELLANEOUS PROVISIONS SECTION 1. Ratification and approval of Original Indenture as supplemented................. 20 Covenants of Original Indenture, except as modified, continue in effect.............. 20 SECTION 2. Forty-third Supplemental Indenture may be executed in counterparts.................. 20 TESTIMONIUM CLAUSE....................................... 20 COMPANY'S SIGNATURES..................................... S-1 TRUSTEE'S SIGNATURES..................................... S-2 COMPANY'S ACKNOWLEDGMENT................................. S-3 TRUSTEE'S ACKNOWLEDGMENT................................. S-4
4 FORTY-THIRD SUPPLEMENTAL INDENTURE, dated as of June 1, 1995, between THE TOLEDO EDISON COMPANY, a corporation organized and existing under the laws of the State of Ohio (hereinafter called the "Company"), and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking association existing under the laws of the United States of America, with its head office at 1 Chase Manhattan Plaza, The City of New York (hereinafter called the "Trustee"), as Trustee. RECITALS The Company has heretofore executed and delivered an Indenture of Mortgage and Deed of Trust dated as of April 1, 1947 (hereinafter referred to as the "Original Indenture") to The Chase National Bank of the City of New York, predecessor Trustee, to secure an issue of First Mortgage Bonds of the Company, issuable in series, and created thereunder an initial series of bonds designated as First Mortgage Bonds, 2 7/8% Series due 1977, being the initial series of bonds issued under the Original Indenture; and The Company has heretofore executed and delivered to The Chase National Bank of the City of New York, predecessor Trustee, four Supplemental Indentures supplementing the Original Indenture dated, respectively, September 1, 1948, April 1, 1949, December 1, 1950 and March 1, 1954 and has heretofore executed and delivered to The Chase Manhattan Bank, which on March 31, 1955, became the Trustee under the Original Indenture by virtue of the merger of The Chase National Bank of the City of New York into President and Directors of The Manhattan Company under the name of The Chase Manhattan Bank, the Fifth and the Sixth Supplemental Indentures dated, respectively, February 1, 1956, and May 1, 1958, supplementing the Original Indenture; and The Chase Manhattan Bank was converted into a national banking association under the name The Chase Manhattan Bank (National Association), effective September 23, 1965; and by virtue of said conversion the continuity of the business of The Chase Manhattan Bank, including its business of acting as corporate trustee, and its corporate existence, have not been affected, so that The Chase Manhattan Bank (National Association) is vested with all the trusts, powers, discretion, immunities, privileges and all other matters as were vested in said The Chase Manhattan Bank under the Indenture (hereinafter defined), with like effect as if originally named as Trustee therein; and 5 2 The Company has heretofore executed and delivered to the Trustee 35 Supplemental Indentures dated, respectively, as follows: Seventh, August 1, 1967, Eighth, November 1, 1970, Ninth, August 1, 1972, Tenth, November 1, 1973, Eleventh, July 1, 1974, Twelfth, October 1, 1975, Thirteenth, June 1, 1976, Fourteenth, October 1, 1978, Fifteenth, September 1, 1979, Sixteenth, September 1, 1980, Seventeenth, October 1, 1980, Eighteenth, April 1, 1981, Nineteenth, November 1, 1981, Twentieth, June 1, 1982, Twenty-first, September 1, 1982, Twenty-second, April 1, 1983, Twenty-third, December 1, 1983, Twenty-fourth, April 1, 1984, Twenty-fifth, October 15, 1984, Twenty-sixth, October 15, 1984, Twenty-seventh, August 1, 1985, Twenty-eighth, August 1, 1985, Twenty-ninth, December 1, 1985, Thirtieth, March 1, 1986, Thirty-first, October 15, 1987, Thirty-second, September 15, 1988, Thirty-third, June 15, 1989, Thirty-fourth, October 15, 1989, Thirty-fifth, May 15, 1990, Thirty-sixth, March 1, 1991, Thirty-seventh, May 1, 1992, Thirty-eighth, August 1, 1992, Thirty-ninth, October 1, 1992, Fortieth, January 1, 1993, Forty-first, September 15, 1994 and Forty-second, May 1, 1995 supplementing the Original Indenture (the Original Indenture, all the aforementioned Supplemental Indentures, this Forty-third Supplemental Indenture and any other indentures supplemental to the Original Indenture are herein collectively called the "Indenture" and this Forty-third Supplemental Indenture is hereinafter called "this Supplemental Indenture"); and Pursuant to the provisions of the Indenture, the Company has issued 48 series of bonds in the aggregate principal amount of $2,062,800,000 of which 29 series (including the Bonds of the 1977 Series issued pursuant to the Original Indenture) in the aggregate principal amount of $1,145,800,000 are no longer outstanding and of which additional portions, aggregating $36,875,000 in principal amount, of four other series have been retired; and The Company covenanted in and by the Original Indenture to execute and deliver such further instruments and do such further acts as may be necessary or proper to carry out more effectually the purposes of the Original Indenture and to make subject to the lien thereof property acquired after the execution and delivery of the Original Indenture; and Under Article 3 of the Original Indenture, the Company is authorized to issue additional bonds upon the terms and conditions expressed in the Original Indenture; and The Company proposes to create two new series of First Mortgage Bonds to be designated as First Mortgage Bonds, Collateral Series C (hereinafter 6 3 called the "Bonds of the 49th Series") and First Mortgage Bonds, Collateral Series D (hereinafter called the "Bonds of the 50th Series") with the respective denominations, rates of interest, date of maturity, redemption provisions and other provisions and agreements in respect thereof as in this Supplemental Indenture set forth; and The Bonds of the 49th Series are to be issued by the Company and delivered to the Revolver Agent Bank (hereinafter defined) to (i) provide for the payment of the Company's obligations to make payments to any person under the Guaranty dated May 14, 1993 of the Company and The Cleveland Electric Illuminating Company (such guaranty, as amended from time to time, herein called the "Guaranty"), in favor of the Lenders party to the Credit Agreement dated as of May 14, 1993, as amended, among Centerior Energy Corporation and Centerior Service Company ("Obligors") and Citibank, N.A., as Agent, and the other banks named therein (such credit agreement, as amended from time to time, herein called the "Revolving Credit Agreement"), and (ii) to provide to such persons the benefits of the security provided for the Bonds of the 49th Series. As used herein, the term "Lenders" shall refer collectively to all banks which are parties to the Revolving Credit Agreement and the term "Revolver Agent Bank" shall refer to the bank designated in the Revolving Credit Agreement as the party responsible for holding the Bonds of the 49th Series as agent for the benefit of the Lenders. The Bonds of the 50th Series are to be issued by the Company and delivered to the LC Agent Bank (hereinafter defined) to (i) provide for the payment of the Company's obligations to make payments to any person under the Reimbursement Agreement dated as of June 29, 1995 among the Company, The Cleveland Electric Illuminating Company, Barclays Bank PLC, Union Bank, Society National Bank and Chemical Bank, as Co-Agents, and the participating banks named therein (such reimbursement agreement, as amended from time to time, herein called the "Reimbursement Agreement") and (ii) to provide to such persons the benefits of the security provided for the Bonds of the 50th Series. As used herein, the term "Participating Banks" shall refer collectively to all banks which are parties to the Reimbursement Agreement and the term "LC Agent Bank" shall refer to the bank designated in the Reimbursement Agreement as the party responsible for holding the Bonds of the 50th Series as agent for the benefit of the Participating Banks. The Company, by appropriate corporate action, has duly resolved and determined to execute this Supplemental Indenture for the purpose of providing for the creation of the Bonds of the 49th Series and the Bonds of the 50th 7 4 Series and of specifying the form, provisions and particulars thereof as in said Original Indenture, as amended, provided or permitted, including the issuance only of fully registered bonds, and of giving to the Bonds of the 49th Series and the Bonds of the 50th Series the protection and security of the Indenture; and The text of the Bonds of the 49th Series is to be substantially in the form following: [FORM OF FULLY REGISTERED BOND OF THE 49TH SERIES] THIS BOND IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR AGENT BANK UNDER THE CREDIT AGREEMENT DATED AS OF MAY 14, 1993, AS AMENDED, AMONG CENTERIOR ENERGY CORPORATION AND CENTERIOR SERVICE COMPANY (COLLECTIVELY, THE "OBLIGORS") AND CITIBANK, N.A. AND THE BANKS NAMED THEREIN (SUCH CREDIT AGREEMENT, AS AMENDED FROM TIME TO TIME, THE "REVOLVING CREDIT AGREEMENT"). THE TOLEDO EDISON COMPANY FIRST MORTGAGE BOND, COLLATERAL SERIES C No. - $ THE TOLEDO EDISON COMPANY, an Ohio corporation (hereinafter called the "Company"), for value received, hereby promises to pay to or registered assigns, the principal sum of Seventy-five Million Dollars ($75,000,000) or such lesser principal amount as is equal to 60% of the aggregate amount from time to time of the Lenders' Commitments (as defined in the Revolving Credit Agreement), in whole or in installments on such date or dates as the Company has any obligation to make payments under the Guaranty of the Company and The Cleveland Electric Illuminating Company dated May 14, 1993, as amended (the "Guaranty"), in favor of the Lenders (as defined in the Revolving Credit Agreement), but not later than June 1, 2006, at the same place or places as payments are required to be made by the Company under the Guaranty, in any coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest on the unpaid principal amount hereof in like coin or currency to the registered owner hereof at said place or places at such rate per annum on each interest payment date (hereinafter 8 5 defined) as shall cause the amount of interest payable on such interest payment date on the Bonds of this Series (hereinafter defined) to equal 60% of the amount of interest and fees payable on such interest payment date under the Revolving Credit Agreement. Such interest shall be payable on the same dates as interest or fees are payable from time to time pursuant to the Revolving Credit Agreement, (each such date herein called an "interest payment date"), until maturity of this Bond, or, if the Agent Bank shall demand redemption of this Bond, until the redemption date, or, if the Company shall default in the payment of the principal due on this Bond, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the Indenture (hereinafter defined). The amount of interest and fees payable from time to time under the Revolving Credit Agreement, the basis on which such interest and fees are computed and the dates on which such interest and fees are payable are set forth in the Revolving Credit Agreement. Except as hereinafter provided, this Bond shall bear interest (a) from the interest payment date next preceding the date of this Bond to which interest has been paid, or (b) if the date of this Bond is an interest payment date to which interest has been paid, then from such date, or (c) if no interest has been paid on this Bond, then from the date of initial issue. This Bond is one of the Bonds of the Company, known as its First Mortgage Bonds, issued and to be issued in one or more series under and equally and ratably secured (except as any sinking, amortization, improvement or other fund, established in accordance with the provisions of said Indenture, may afford additional security for the Bonds of any particular series) by a certain Indenture of Mortgage and Deed of Trust, dated as of April 1, 1947 (hereinafter called the "Original Indenture"), made by the Company to The Chase National Bank of the City of New York (The Chase Manhattan Bank (National Association), successor), as Trustee (hereinafter called the "Trustee"), and by certain indentures supplemental thereto, including the Forty-third Supplemental Indenture dated as of June 1, 1995 (the Original Indenture and said indentures supplemental thereto herein collectively called the "Indenture" and said Forty-third Supplemental Indenture hereinafter called the "Supplemental Indenture"), to which Indenture reference is hereby made for a description of the property mortgaged, the nature and extent of the security, the rights and limitations of rights of the Company, the Trustee and the holders of said Bonds and of the coupons appurtenant to coupon Bonds under the Indenture and the terms and conditions upon which said Bonds are and are to be issued and secured, to all of the provisions of which Indenture and of all 9 6 such supplemental indentures in respect of such security, including the provisions of the Indenture permitting the issue of Bonds of any series for property which, under the restrictions and limitations therein specified, may be subject to liens prior to the lien of the Indenture, the holder, by accepting this Bond, assents. To the extent permitted by and as provided in the Indenture, the rights and obligations of the Company and of the holders of said Bonds and coupons (including those pertaining to any sinking or other fund) may be changed and modified, with the consent of the Company, by the holders of at least 75% in aggregate principal amount of the Bonds then outstanding, such percentage being determined as provided in the Indenture; provided, however, that in case such changes and modifications affect one or more but less than all series of Bonds then outstanding, they shall be required to be adopted only by the affirmative vote of the holders of at least 75% in aggregate principal amount of outstanding Bonds of such one or more series so affected; and further provided, that without the consent of the holder hereof no such change or modification shall be made which will extend the time of payment of the principal of, or of the interest or premium, if any, on this Bond or reduce the principal amount hereof or the rate of interest or the premium, if any, hereon, or affect any other modification of the terms of payment of such principal or interest, or premium, if any, or will permit the creation of any lien ranking prior to or on a parity with the lien of the Indenture on any of the mortgaged property, or will deprive the holder hereof of the benefit of a lien upon the mortgaged property for the security of this Bond, or will reduce the percentage of Bonds required for the adoption of changes or modifications as aforesaid. This Bond is the only Bond of a series of Bonds designated as the First Mortgage Bonds, Collateral Series C, of the Company (herein called "Bonds of this Series") limited, except as otherwise provided in the Indenture, in aggregate principal amount to $75,000,000 but the aggregate principal amount hereof outstanding at any time shall not exceed such lesser amount as is equal to 60% of the amount of the Lenders' Commitments and is issued under and secured by the Supplemental Indenture. The Bonds of this Series have been issued by the Company to the Agent Bank to (i) provide for the payment of the Company's obligations to make payments to any person under the Guaranty, and (ii) to provide to such persons the benefits of the security provided for the Bonds of this Series. As used herein, the term "Agent Bank" shall refer to the bank designated in the Revolving Credit Agreement as the party responsible for holding the Bonds of this Series as agent for the benefit of the Lenders. The Bonds of this 10 7 Series have been delivered to the Agent Bank as agent for the benefit of the Lenders. Any payment made in respect of the Company's obligations under the Guaranty or by the Obligors under the Revolving Credit Agreement shall be deemed a payment in respect of the Bonds of this Series, but such payment shall not reduce the principal amount of the Bonds of this Series unless the aggregate amount of the Lenders' Commitments is irrevocably reduced concurrently with such payment. In the event that all of the Company's obligations under the Guaranty and the obligations of the Obligors under the Revolving Credit Agreement have been discharged, this Bond shall be deemed to have been paid in full and shall be surrendered to the Trustee for cancellation. The Bonds of this Series are subject to redemption prior to maturity as provided in Section 9 of Article I of the Supplemental Indenture at a redemption price of 100% of the principal amount to be redeemed and any accrued and unpaid interest and all other amounts payable by the Company under the Guaranty. The principal of this Bond may be declared or may become due before the maturity hereof, on the conditions, in the manner and at the times set forth in the Indenture, upon the happening of a default as therein defined. No recourse under or upon any covenant or obligation of the Indenture, or of any indenture supplemental thereto, or of this Bond, for the payment of the principal of or the interest on this Bond, or for any claim based thereon, or otherwise in any manner in respect thereof, shall be had against any incorporator, subscriber to the capital stock, stockholder, officer or director, as such, of the Company, whether former, present or future, either directly or indirectly through the Company or any predecessor or successor corporation or the Trustee, by the enforcement of any subscription to capital stock, assessment or otherwise, or by any legal or equitable proceeding by virtue of any constitution, statute, or otherwise (including, without limiting the generality of the foregoing, any proceeding to enforce any claimed liability of stockholders of the Company based upon any theory of disregarding the corporate entity of the Company or upon any theory that the Company was acting as the agent or instrumentality of the stockholders), any and all such liability of incorporators, stockholders, subscribers, officers and directors, as such, being released by the holder hereof, by the acceptance of this Bond, and being likewise waived and released by the terms of the Indenture. 11 8 This Bond shall not be valid or become obligatory for any purpose until the certificate of authentication endorsed hereon shall have been signed by The Chase Manhattan Bank (National Association) or its successor, as Trustee under the Indenture. IN WITNESS WHEREOF, THE TOLEDO EDISON COMPANY has caused this Bond to be signed in its name by its President or a Vice-President and its corporate seal to be impressed or imprinted hereon and attested by its Secretary or an Assistant Secretary. Dated THE TOLEDO EDISON COMPANY By Vice President. Attest: Secretary. [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Bond is one of the Bonds of the series designated herein, described in the within-mentioned Indenture. THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), AS TRUSTEE By Authorized Officer. [END OF FORM OF BOND OF THE 49TH SERIES] 12 9 The text of the Bonds of the 50th Series is to be substantially in the form following: [FORM OF FULLY REGISTERED BOND OF THE 50TH SERIES] THIS BOND IS NOT TRANSFERABLE EXCEPT TO A SUCCESSOR AGENT BANK UNDER THE REIMBURSEMENT AGREEMENT DATED AS OF JUNE 29, 1995 AMONG THE COMPANY AND THE CLEVELAND ELECTRIC ILLUMINATING COMPANY, BARCLAY'S BANK PLC, UNION BANK, SOCIETY NATIONAL BANK AND CHEMICAL BANK AND THE OTHER BANKS NAMED THEREIN (SUCH REIMBURSEMENT AGREEMENT, AS AMENDED FROM TIME TO TIME, THE "REIMBURSEMENT AGREEMENT). The Toledo Edison Company FIRST MORTGAGE BOND, COLLATERAL SERIES D No. - $ THE TOLEDO EDISON COMPANY, an Ohio corporation (hereinafter called the Company), for value received, hereby promises to pay to or registered assigns, the principal sum of One Hundred Thirty-five Million, Six Hundred Thousand Dollars ($135,600,000) or such lesser principal amount as is equal to 60% of the sum of (a) the Maximum Available Credit Amount (as defined in the Reimbursement Agreement) from time to time of the Letters of Credit (as defined in the Reimbursement Agreement) plus (b) the aggregate principal amount of Letter of Credit drawings and Advances (as defined in the Reimbursement Agreement) outstanding from time to time under the Reimbursement Agreement minus (c) the amount, if any, of cash collateral held by the Agent Bank (hereinafter defined) under the Reimbursement Agreement ("Cash Collateral"), in whole or in installments on such date or dates as the Company has any obligation to (i) reimburse the Fronting Bank (as defined in the Reimbursement Agreement) for any amounts paid by the Fronting Bank under a Letter of Credit or (ii) repay any Advance, but not later than June 1, 2017, at the same place or places as such reimbursement and repayment obligations are payable, in any coin or currency of the United States of America which at the time of such payment shall be legal tender for the payment of public and private debts, and to pay interest on the unpaid principal amount hereof in like coin or currency to the registered 13 10 owner hereof at said place or places at such rate per annum on each interest payment date (hereinafter defined) as shall cause the amount of interest payable on such interest payment date on the Bonds of this Series (hereinafter defined) to equal 60% of the amount of interest and fees payable on such interest payment date under the Reimbursement Agreement multiplied by a fraction, the numerator of which is the aggregate principal amount of Bonds of this Series then outstanding and the denominator of which is such aggregate principal amount plus 60% of the amount, if any, of Cash Collateral. Such interest shall be payable on the same dates as interest or fees are payable from time to time pursuant to the Reimbursement Agreement (each such date hereinafter called an "interest payment date"), until maturity of this Bond, or, if the Agent Bank shall demand redemption of this Bond, until the redemption date, or, if the Company shall default in the payment of the principal due on this Bond, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the Indenture (hereinafter defined). The amount of interest and fees payable from time to time under the Reimbursement Agreement, the basis on which such interest and fees are computed and the dates on which such interest and fees are payable are set forth in the Reimbursement Agreement. Except as hereinafter provided, this Bond shall bear interest (a) from the interest payment date next preceding the date of this Bond to which interest has been paid, or (b) if the date of this Bond is an interest payment date to which interest has been paid, then from such date, or (c) if no interest has been paid on this Bond, then from the date of initial issue. This Bond is one of the Bonds of the Company, known as its First Mortgage Bonds, issued and to be issued in one or more series under and equally and ratably secured (except as any sinking, amortization, improvement or other fund, established in accordance with the provisions of said Indenture, may afford additional security for the Bonds of any particular series) by a certain Indenture of Mortgage and Deed of Trust, dated as of April 1, 1947 (hereinafter called the "Original Indenture"), made by the Company to The Chase National Bank of the City of New York (The Chase Manhattan Bank (National Association), successor), as Trustee (hereinafter called the "Trustee"), and by certain indentures supplemental thereto, including the Forty-third Supplemental Indenture dated as of June 1, 1995 (the Original Indenture and said indentures supplemental thereto herein collectively called the "Indenture" and said Forty-third Supplemental Indenture hereinafter called the "Supplemental Indenture"), to which Indenture reference is hereby made for a 14 11 description of the property mortgaged, the nature and extent of the security, the rights and limitations of rights of the Company, the Trustee and the holders of said Bonds and of the coupons appurtenant to coupon Bonds under the Indenture and the terms and conditions upon which said Bonds are and are to be issued and secured, to all of the provisions of which Indenture and of all such supplemental indentures in respect of such security, including the provisions of the Indenture permitting the issue of Bonds of any series for property which, under the restrictions and limitations therein specified, may be subject to liens prior to the lien of the Indenture, the holder, by accepting this Bond, assents. To the extent permitted by and as provided in the Indenture, the rights and obligations of the Company and of the holders of said Bonds and coupons (including those pertaining to any sinking or other fund) may be changed and modified, with the consent of the Company, by the holders of at least 75% in aggregate principal amount of the Bonds then outstanding, such percentage being determined as provided in the Indenture; provided, however, that in case such changes and modifications affect one or more but less than all series of Bonds then outstanding, they shall be required to be adopted only by the affirmative vote of the holders of at least 75% in aggregate principal amount of outstanding Bonds of such one or more series so affected; and further provided, that without the consent of the holder hereof no such change or modification shall be made which will extend the time of payment of the principal of, or of the interest or premium, if any, on this Bond or reduce the principal amount hereof or the rate of interest or the premium, if any, hereon, or affect any other modification of the terms of payment of such principal or interest, or premium, if any, or will permit the creation of any lien ranking prior to or on a parity with the lien of the Indenture on any of the mortgaged property, or will deprive the holder hereof of the benefit of a lien upon the mortgaged property for the security of this Bond, or will reduce the percentage of Bonds required for the adoption of changes or modifications as aforesaid. This Bond is the only Bond of a series of Bonds designated as the First Mortgage Bonds, Collateral Series D, of the Company (herein called "Bonds of this Series") limited, except as otherwise provided in the Indenture, in aggregate principal amount to $135,600,000 but the aggregate principal amount hereof outstanding at any time shall not exceed such lesser amount as is equal to 60% of the sum of (a) the Maximum Available Credit Amount from time to time of the Letters of Credit plus (b) the aggregate principal amount of Letter of Credit drawings and Advances outstanding from time to time under the Reimbursement Agreement minus (c) the amount, if any, of 15 12 Cash Collateral, and is issued under and secured by the Supplemental Indenture. The Bonds of this Series have been issued by the Company to the Agent Bank to (i) provide for the payment of the Company's obligations to make payments to any person under the Reimbursement Agreement and (ii) to provide to such persons the benefits of the security provided for the Bonds of this Series. As used herein, the term "Agent Bank" shall refer to the bank designated in the Reimbursement Agreement as the party responsible for holding the Bonds of this Series as agent for the benefit of the Participating Banks (as defined in the Reimbursement Agreement). The Bonds of this Series have been delivered to the Agent Bank as agent for the Participating Banks. Any payment made in respect of the Company's obligations under the Reimbursement Agreement shall be deemed a payment in respect of the Bonds of this Series, but such payment shall not reduce the principal amount of the Bonds of this Series unless the sum of (a) the Maximum Available Credit Amount of the Letters of Credit, plus (b) the aggregate principal amount of Letter of Credit drawings and Advances then outstanding under the Reimbursement Agreement, is reduced concurrently with such payment. In the event that all of the Company's obligations under the Reimbursement Agreement have been discharged, this Bond shall be deemed paid in full and shall be surrendered to the Trustee for cancellation. The Bonds of this Series are subject to redemption prior to maturity as provided in Section 9 of Article II of the Supplemental Indenture at a redemption price of 100% of the principal amount to be redeemed, any accrued and unpaid interest and all other amounts payable by the Company under the Reimbursement Agreement. The principal of this Bond may be declared or may become due before the maturity hereof, on the conditions, in the manner and at the times set forth in the Indenture, upon the happening of a default as therein defined. No recourse under or upon any covenant or obligation of the Indenture, or of any indenture supplemental thereto, or of this Bond, for the payment of the principal of or the interest on this Bond, or for any claim based thereon, or otherwise in any manner in respect thereof, shall be had against any incorporator, subscriber to the capital stock, stockholder, officer or director, as such, of the Company, whether former, present or future, either directly or indirectly 16 13 through the Company or any predecessor or successor corporation or the Trustee, by the enforcement of any subscription to capital stock, assessment or otherwise, or by any legal or equitable proceeding by virtue of any constitution, statute, or otherwise (including, without limiting the generality of the foregoing, any proceeding to enforce any claimed liability of stockholders of the Company based upon any theory of disregarding the corporate entity of the Company or upon any theory that the Company was acting as the agent or instrumentality of the stockholders), any and all such liability of incorporators, stockholders, subscribers, officers and directors, as such, being released by the holder hereof, by the acceptance of this Bond, and being likewise waived and released by the terms of the Indenture. This Bond shall not be valid or become obligatory for any purpose until the certificate of authentication endorsed hereon shall have been signed by The Chase Manhattan Bank (National Association) or its successor, as Trustee under the Indenture. IN WITNESS WHEREOF, THE TOLEDO EDISON COMPANY has caused this Bond to be signed in its name by its President or a Vice-President and its corporate seal to be impressed or imprinted hereon and attested by its Secretary or an Assistant Secretary. Dated THE TOLEDO EDISON COMPANY By Vice President. Attest: Secretary. 17 14 [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Bond is one of the Bonds of the series designated herein, described in the within-mentioned Indenture. THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), AS TRUSTEE By Authorized Officer. [END OF FORM OF BOND OF 50TH SERIES] All conditions and requirements necessary to make this Supplemental Indenture a valid, legal and binding instrument in accordance with its terms and to make the Bonds of the 49th Series and the Bonds of the 50th Series, when duly executed by the Company and authenticated and delivered by the Trustee, and duly issued, the valid, binding and legal obligations of the Company, have been done and performed, and the execution and delivery of this Supplemental Indenture have been in all respects duly authorized. NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That The Toledo Edison Company, the Company herein named, in consideration of the premises and of One Dollar ($1.00) to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, does hereby covenant and agree to and with the Trustee and its successors in the trust under the Indenture, for the benefit of those who shall hold the bonds to be issued hereunder and thereunder, as hereinafter provided, as follows: ARTICLE I CREATION AND DESCRIPTION OF BONDS OF THE 49TH SERIES SECTION 1. A new series of bonds to be issued under and secured by the Indenture is hereby created, to be designated as "First Mortgage Bonds, Collateral Series C" (such bonds herein referred to as the "Bonds of the 49th Series"). The Bonds of the 49th Series shall be limited to an aggregate principal amount of $75,000,000 but the aggregate principal amount thereof outstanding at any time shall not exceed such lesser amount as is equal to 60% of the aggregate amount of the Lenders' Commitments (as defined in the Revolving Credit Agreement). The Bonds of the 49th Series shall be substantially in the form hereinbefore recited. 18 15 SECTION 2. The principal of all Bonds of the 49th Series shall be payable in whole or in installments on such date or dates as the Company has any obligations under the Guaranty to make any payment to the Lenders, but not later than June 1, 2006, and shall bear interest from the time hereinafter provided at such rate per annum on each interest payment date (hereinafter defined) as shall cause the amount of interest payable on each interest payment date on the Bonds of the 49th Series to equal 60% of the amount of interest and fees payable on such interest payment date under the Revolving Credit Agreement. Such interest shall be payable on the same dates as interest or fees are payable from time to time pursuant to the Revolving Credit Agreement (each such date herein called an "interest payment date"), until the maturity of the Bonds of the 49th Series, or, in the case the Revolver Agent Bank shall demand redemption of any such Bonds, until the redemption date, or, in the case of any default by the Company in the payment of the principal due on any such Bonds, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the Indenture. The amount of interest and fees payable from time to time under the Revolving Credit Agreement, the basis on which such interest and fees are computed and the dates on which such interest and fees are payable are set forth in the Revolving Credit Agreement. Except as hereinafter provided, each Bond of the 49th Series shall bear interest from the later of the date of initial authentication of such Bond or the most recent date to which interest has been paid until the principal of such Bond is paid. SECTION 3. The Bonds of the 49th Series shall be payable as to principal and interest at the same place or places as payments are required to be made by the Company under the Guaranty; and both principal and interest shall be payable in any coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts. SECTION 4. The Bonds of the 49th Series shall be issued only as one fully registered Bond in the denomination of $75,000,000. SECTION 5. Bonds of the 49th Series shall be transferable only to a successor Revolver Agent Bank under the Revolving Credit Agreement in the manner and upon the terms set forth in sec. 2.05 of the Original Indenture, but notwithstanding the provisions of sec. 2.08 of the Original Indenture, no charge shall be made upon any transfer or exchange of Bonds of the 49th Series other 19 16 than for any tax or taxes or other governmental charge required to be paid by the Company. SECTION 6. The Bonds of the 49th Series shall be registered in the name of the Revolver Agent Bank. SECTION 7. Any payment made in respect of the Company's obligations under the Guaranty or by the Obligors under the Revolving Credit Agreement shall be deemed a payment in respect of the Bonds of the 49th Series but such payment shall not reduce the principal amount of the Bonds of the 49th Series unless the aggregate amount of the Lenders' Commitments is irrevocably reduced concurrently with such payment. In the event that all of the Company's obligations under the Guaranty and the obligations of the Obligors under the Revolving Credit Agreement have been discharged, the Bonds of the 49th Series shall be deemed to be paid in full. SECTION 8. The Bonds of the 49th Series may be executed by the Company and delivered to the Trustee and, upon compliance with all applicable provisions and requirements of the Original Indenture in respect thereof, shall be authenticated by the Trustee and delivered (without awaiting the filing or recording of this Supplemental Indenture) in accordance with the written order or orders of the Company. SECTION 9. The Bonds of the 49th Series shall be redeemed by the Company in whole at any time prior to maturity at a redemption price of 100% of the principal amount to be redeemed, plus any accrued and unpaid interest to the redemption date, but only if the Trustee shall receive a written demand from the Revolver Agent Bank for redemption of all Bonds of the 49th Series held by the Revolver Agent Bank stating that an "Event of Default" under the Revolving Credit Agreement has occurred and is continuing and that payment of the principal amount outstanding under the Revolving Credit Agreement, all interest thereon and all other amounts payable thereunder are immediately due and payable and demanding payment thereof; provided, however, that the Bonds of the 49th Series shall not be redeemed in the event that prior to the date of such redemption the Trustee shall have received a certificate of the Revolver Agent Bank (a) stating that there has been a waiver of such Event of Default, or (b) withdrawing said written demand. The redemption of the Bonds of the 49th Series shall be made forthwith upon receipt of such demand by the Company from the Majority Banks (as defined in the Revolving Credit Agreement), the Revolver Agent Bank on behalf of the Majority Banks, or the Trustee. 20 17 ARTICLE II CREATION AND DESCRIPTION OF BONDS OF THE 50TH SERIES SECTION 1. A new series of bonds to be issued under and secured by the Indenture is hereby created, to be designated as "First Mortgage Bonds, Collateral Series D" (such bonds herein referred to as the "Bonds of the 50th Series"). The Bonds of the 50th Series shall be limited to an aggregate principal amount of $135,600,000 but the aggregate principal amount thereof outstanding at any time shall not exceed such lesser amount as is equal to 60% of the sum of (a) the Maximum Available Credit Amount (as defined in the Reimbursement Agreement) from time to time of the Letters of Credit (as defined in the Reimbursement Agreement), plus (b) the aggregate principal amount of Letter of Credit drawings and Advances (as defined in the Reimbursement Agreement) minus (c) the amount, if any, of cash collateral held by the LC Agent Bank under the Reimbursement Agreement ("LC Cash Collateral"), outstanding from time to time under the Reimbursement Agreement. The Bonds of the 50th Series shall be substantially in the form hereinbefore recited. SECTION 2. The principal of all Bonds of the 50th Series shall be payable in whole or in installments on such date or dates as the Company has any obligations to (i) reimburse the Fronting Bank (as defined in the Reimbursement Agreement) for any amounts paid by the Fronting Bank under a Letter of Credit and (ii) repay any Advance, but not later than June 1, 2017, and shall bear interest from the time hereinafter provided at such rate per annum on each interest payment date (hereinafter defined) as shall cause the amount of interest payable on each interest payment date on the Bonds of the 50th Series to equal 60% of the amount of interest and fees payable on such interest payment date under the Reimbursement Agreement multiplied by a fraction, the numerator of which is the aggregate principal amount of Bonds of the 50th Series then outstanding and the denominator of which is such aggregate principal amount plus 60% of the amount, if any, of LC Cash Collateral. Such interest shall be payable on the same dates from time to time as interest or fees are payable from time to time pursuant to the Reimbursement Agreement (each such date herein called an "interest payment date"), until the maturity of the Bonds of the 50th Series, or, in the case the LC Agent Bank shall demand redemption of any such Bonds, until the redemption date, or, in the case of any default by the Company in the payment of the principal due on any such Bonds, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the Indenture. The amount of 21 18 interest and fees payable from time to time under the Reimbursement Agreement, the basis on which such interest and fees are computed and the dates on which such interest and fees are payable are set forth in the Reimbursement Agreement. SECTION 3. The Bonds of the 50th Series shall be payable as to principal and interest at the same place or places as payments are required to be made by the Company under the Reimbursement Agreement; and both principal and interest shall be payable in any coin or currency of the United States of America which at the time of payment shall be legal tender for the payment of public and private debts. SECTION 4. The Bonds of the 50th Series shall be issued only as one fully registered Bond in the denomination of $135,600,000. SECTION 5. Bonds of the 50th Series shall be transferable only to a successor LC Agent Bank under the Reimbursement Agreement in the manner and upon the terms set forth in sec. 2.05 of the Original Indenture, but notwithstanding the provisions of sec. 2.08 of the Original Indenture, no charge shall be made upon any transfer or exchange of Bonds of the 50th Series other than for any tax or taxes or other governmental charge required to be paid by the Company. SECTION 6. The Bonds the 50th Series shall be registered in the name of the LC Agent Bank. SECTION 7. Any payment made in respect of the Company's obligations under the Reimbursement Agreement shall be deemed a payment in respect of the Bonds of the 50th Series, but such payment shall not reduce the principal amount of the Bonds of the 50th Series unless the sum of (a) the Maximum Available Credit Amount of the Letters of Credit plus (b) the aggregate principal amount of Letter of Credit drawings and Advances then outstanding under the Reimbursement Agreement is irrevocably reduced concurrently with such payment. In the event that all of the Company's obligations under the Reimbursement Agreement have been discharged, the Bonds of the 50th Series shall be deemed to be paid in full. SECTION 8. The Bonds of the 50th Series may be executed by the Company and delivered to the Trustee and, upon compliance with all applicable provisions and requirements of the Original Indenture in respect thereof, shall be authenticated by the Trustee and delivered (without awaiting the filing 22 19 or recording of this Supplemental Indenture) in accordance with the written order or orders of the Company. SECTION 9. The Bonds of the 50th Series shall be redeemed by the Company in whole at any time prior to maturity at a redemption price of 100% of the principal amount to be redeemed, plus any accrued and unpaid interest to the redemption date, but only if the Trustee shall receive a written demand from the LC Agent Bank for redemption of all Bonds of the 50th Series held by the LC Agent Bank stating that a "Reimbursement Event of Default" under the Reimbursement Agreement has occurred and is continuing and that payment of the Advances and all other principal amounts outstanding under the Reimbursement Agreement, all interest thereon and all other amounts payable thereunder are due and payable within two Business Days (as defined in the Reimbursement Agreement) after demand therefor by the Required Banks (as defined in the Reimbursement Agreement) or are then due and payable; provided, however, that the Bonds of the 50th Series shall not be redeemed in the event that prior to the date of such redemption the Trustee shall have received a certificate of the LC Agent Bank (a) stating that there has been a waiver of such Reimbursement Event of Default or (b) withdrawing said written demand. The redemption of the Bonds of the 50th Series shall be made forthwith upon receipt of such demand by the Company from the Required Banks, the LC Agent Bank on behalf of the Required Banks, or the Trustee. ARTICLE III THE TRUSTEE The Trustee accepts the trusts created by this Supplemental Indenture upon the terms and conditions in the Original Indenture and in this Supplemental Indenture set forth. The recitals in this Supplemental Indenture are made by the Company only and not by the Trustee. Each and every term and condition contained in Article 13 of the Original Indenture shall apply to this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture. 23 20 ARTICLE IV MISCELLANEOUS PROVISIONS SECTION 1. The Original Indenture, as heretofore supplemented, is in all respects ratified and confirmed, and the Original Indenture, this Supplemental Indenture and all other indentures supplemental to the Original Indenture shall be read, taken and construed as one and the same instrument. Neither the execution of this Supplemental Indenture nor anything herein contained shall be construed to impair the lien of the Indenture on any of the property subject thereto, and such lien shall remain in full force and effect as security for all bonds now outstanding or hereafter issued under the Indenture. All covenants and provisions of the Original Indenture, except as modified by this Supplemental Indenture and all other indentures supplemental to the Original Indenture, shall continue in full force and effect for the respective periods of time therein specified, and this Supplemental Indenture shall form part of the Indenture. All terms defined in Article 1 of the Original Indenture shall, for all purposes of this Supplemental Indenture, have the meanings in said Article 1 specified, except as modified by this Supplemental Indenture and all other indentures supplemental to the Original Indenture and unless the context otherwise requires. SECTION 2. This Supplemental Indenture may be simultaneously executed in any number of counterparts, and all said counterparts executed and delivered, each as an original, shall constitute but one and the same instrument. IN WITNESS WHEREOF, The Toledo Edison Company has caused its corporate name to be hereunto affixed and this instrument to be signed by its President or a Vice President and its corporate seal to be hereunto affixed and attested by its Secretary or an Assistant Secretary for and in its behalf and The Chase Manhattan Bank (National Association), as Trustee, in evidence of its acceptance of the trust hereby created, has caused its corporate name to be hereunto affixed, this instrument to be signed by its President or a Vice President and its corporate seal to be hereunto affixed and attested by its Secretary or an Assistant Secretary for and in its behalf, all as of the day and year first above written. 24 S-1 THE TOLEDO EDISON COMPANY, By G.R. LEIDICH Vice President Attest: J.T. PERCIO Secretary Signed, sealed and acknowledged on behalf of THE TOLEDO EDISON COMPANY in the presence of PATRICIA BARKEY - ----------------------------------- Patricia A. Barkey SONDRA Y. CLARKE - ----------------------------------- Sondra Y. Clarke As witnesses [SEAL] 25 S-2 THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Trustee, By VALERIE DUNBAR Second Vice President Attest: SAM SCHWARTZMAN Assistant Secretary Signed, sealed and acknowledged on behalf of THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION) in the presence of LYNN M. FITZPATRICK - ----------------------------------- Lynn M. Fitzpatrick DONNA FITZSIMMONS - ----------------------------------- Donna Fitzsimmons As witnesses [SEAL] 26 S-3 STATE OF OHIO ) COUNTY OF CUYAHOGA ) ss: On this day of June, 1995, before me personally appeared GARY R. LEIDICH and J. T. PERCIO to me personally known, who being by me severally duly sworn, did say that they are a Vice President and the Secretary, respectively, of The Toledo Edison Company, that the seal affixed to the foregoing instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said corporation. SONDRA Y. CLARKE ---------------------------- Notary Public Sondra Y. Clarke Notary Public, State of Ohio Recorded in Cuyahoga County My Commission Expires November 25, 1998 [SEAL] 27 S-4 STATE OF NEW YORK ) COUNTY OF NEW YORK ) ss: On this day of June, 1995, before me personally appeared VALERIE DUNBAR and SAM SCHWARTZMAN to me personally known, who being by me severally duly sworn, did say that they are a Second Vice President and an Assistant Secretary, respectively, of The Chase Manhattan Bank (National Association), that the seal affixed to the foregoing instrument is the corporate seal of said association and that said instrument was signed and sealed in behalf of said association by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said association. MARGARET M. PRICE ---------------------------- Notary Public Notary Public, State of New York No. 24-4980599 Qualified in Kings County Commission Expires April 22, 1997 THIS INSTRUMENT PREPARED BY KEVIN P. MURPHY, ATTORNEY AT LAW. [SEAL] 28 R-1 This page contains information as to recording and filing which was not set forth in this Supplemental Indenture at the time of execution. This page is not a part of this Supplemental Indenture. RECORDING AND FILING DATA This Supplemental Indenture was filed for record and recorded in the record of mortgages in the offices of the Recorders of the following Counties:
COUNTY VOLUME PAGE(S) FILED FOR RECORD - ------------------------- ---------- ------------ --------------------- Ohio Belmont................ 639 642 June 30, 1995 Defiance............... 324 843 June 29, 1995 Erie................... 227 544 June 29, 1995 Fulton................. 329 547 June 29, 1995 Henry.................. 270 246 June 29, 1995 Lake................... 1131 284 June 29, 1995 Lorain................. 1104 787 June 29, 1995 Monroe................. 14 309 June 30, 1995 Ottawa................. 456 843 June 29, 1995 Paulding............... 292 453 June 29, 1995 Putnam................. 578 192 June 29, 1995 Sandusky............... 479 998 June 29, 1995 Seneca................. 512 636 June 29, 1995 Williams............... 350 655 June 29, 1995 Wood................... 1014 282 June 29, 1995 Pennsylvania Beaver................. 1374 750 June 29, 1995
MICROFICHE ---------- Lucas, Ohio............ 95-1249A07
An amendment to a previously filed financing statement and a counterpart of this Supplemental Indenture were filed in the office of the Secretary of the Commonwealth of Pennsylvania on July 6, 1995 under original or amendment file number 07851362, microfilm number 24450676, to comply with the filing requirements of the Pennsylvania enactment of the Uniform Commercial Code. EX-4.F 9 EXHIBIT 4.F 1 Exhibit 4(f) [CONFORMED] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE TOLEDO EDISON COMPANY TO THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), TRUSTEE. ------------------------ FORTY-FOURTH SUPPLEMENTAL INDENTURE DATED AS OF JULY 14, 1995 ------------------------ (SUPPLEMENTAL TO INDENTURE DATED AS OF APRIL 1, 1947) ------------------------ FIRST MORTGAGE BONDS, 7 3/4% SERIES DUE 2020-A - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 TABLE OF CONTENTS
PAGE --------- PARTIES.................................................. 1 RECITALS................................................. 1 FORM OF BOND OF THIS SERIES.............................. 4 GRANTING CLAUSES......................................... 13 ARTICLE I CREATION AND DESCRIPTION OF BONDS OF THIS SERIES SECTION 1. Creation of Bonds of this Series, limit on amount issuable........................... 13 SECTION 2. Interest Rates, Computation and Payment Dates..................................... 13 SECTION 3. Place and coin of payment................... 13 SECTION 4. Denominations............................... 14 SECTION 5. Transfer and Exchange....................... 14 SECTION 6. Record date for payment of interest......... 14 SECTION 7. Date of Bonds of this Series................ 15 SECTION 8. Authentication of Bonds of this Series by Trustee................................ 15 ARTICLE II REDEMPTION OF BONDS OF THIS SERIES SECTION 1. Bonds of this Series redeemable............. 15 SECTION 2. Mandatory redemption provisions............. 16 SECTION 3. Certain provisions of Original Indenture applicable to redemption of Bonds of this Series.................................... 17 SECTION 4. Bondholder agrees to accept payment of Bonds of this Series redeemed prior to maturity.................................. 17
3 ii
PAGE --------- ARTICLE III PAYMENT DEEMED MADE OF BONDS OF THIS SERIES SECTION 1. Upon surrender of Authority Bonds purchased................................. 17 SECTION 2. Upon payment of Authority Bonds............. 18 SECTION 3. Surrender and cancellation of Bonds of this Series.................................... 18 ARTICLE IV THE TRUSTEE SECTION 1. The Trustee accepts trust created by Forty-fourth Supplemental Indenture....... 18 SECTION 2. Agency of the Company other than the Trustee................................... 19 SECTION 3. Trustee advises Company of notations provided for in Article III............... 19 ARTICLE V MISCELLANEOUS PROVISIONS SECTION 1. Ratification and approval of Original Indenture as supplemented................. 19 Covenants of Original Indenture, except as modified, continue in effect.............. 19 SECTION 2. Forty-fourth Supplemental Indenture may be executed in counterparts.................. 20 TESTIMONIUM CLAUSE....................................... 20 SIGNATURES AND SEALS..................................... S-1 ACKNOWLEDGMENTS.......................................... S-2 RECORDING AND FILING DATA................................ R-1
4 FORTY-FOURTH SUPPLEMENTAL INDENTURE, dated as of July 14, 1995, between THE TOLEDO EDISON COMPANY, a corporation organized and existing under the laws of the State of Ohio (hereinafter called the "Company"), and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking association existing under the laws of the United States of America, with its head office at 1 Chase Manhattan Plaza, The City of New York (hereinafter called the "Trustee"), as Trustee. RECITALS The Company has heretofore executed and delivered an Indenture of Mortgage and Deed of Trust dated as of April 1, 1947 (hereinafter referred to as the "Original Indenture") to The Chase National Bank of the City of New York, predecessor Trustee, to secure an issue of First Mortgage Bonds of the Company, issuable in series, and created thereunder an initial series of bonds designated as First Mortgage Bonds, 2 7/8% Series due 1977, being the initial series of bonds issued under the Original Indenture; and The Company has heretofore executed and delivered to The Chase National Bank of the City of New York, predecessor Trustee, four Supplemental Indentures supplementing the Original Indenture dated, respectively, September 1, 1948, April 1, 1949, December 1, 1950 and March 1, 1954 and has heretofore executed and delivered to The Chase Manhattan Bank, which on March 31, 1955, became the Trustee under the Original Indenture by virtue of the merger of The Chase National Bank of the City of New York into President and Directors of The Manhattan Company under the name of The Chase Manhattan Bank, the Fifth and the Sixth Supplemental Indentures dated, respectively, February 1, 1956, and May 1, 1958, supplementing the Original Indenture; and The Chase Manhattan Bank was converted into a national banking association under the name The Chase Manhattan Bank (National Association), effective September 23, 1965; and by virtue of said conversion the continuity of the business of The Chase Manhattan Bank, including its business of acting as corporate trustee, and its corporate existence, have not been affected, so that The Chase Manhattan Bank (National Association) is vested with all the trusts, powers, discretion, immunities, privileges and all other matters as were vested in said The Chase Manhattan Bank under the Indenture, with like effect as if originally named as Trustee therein; and 5 2 The Company has heretofore executed and delivered to the Trustee 37 Supplemental Indentures dated, respectively, as follows: Seventh, August 1, 1967, Eighth, November 1, 1970, Ninth, August 1, 1972, Tenth, November 1, 1973, Eleventh, July 1, 1974, Twelfth, October 1, 1975, Thirteenth, June 1, 1976, Fourteenth, October 1, 1978, Fifteenth, September 1, 1979, Sixteenth, September 1, 1980, Seventeenth, October 1, 1980, Eighteenth, April 1, 1981, Nineteenth, November 1, 1981, Twentieth, June 1, 1982, Twenty-first, September 1, 1982, Twenty-second, April 1, 1983, Twenty-third, December 1, 1983, Twenty-fourth, April 1, 1984, Twenty-fifth, October 15, 1984, Twenty-sixth, October 15, 1984, Twenty-seventh, August 1, 1985, Twenty-eighth, August 1, 1985, Twenty-ninth, December 1, 1985, Thirtieth, March 1, 1986, Thirty-first, October 15, 1987, Thirty-second, September 15, 1988, Thirty-third, June 15, 1989, Thirty-fourth, October 15, 1989, Thirty-fifth, May 15, 1990, Thirty-sixth, March 1, 1991, Thirty-seventh, May 1, 1992, Thirty-eighth, August 1, 1992, Thirty-ninth, October 1, 1992, Fortieth, January 1, 1993, Forty-first, September 15, 1994, Forty-second, May 1, 1995 and Forty-third, June 1, 1995 supplementing the Original Indenture (The Original Indenture, all the aforementioned Supplemental Indentures, this Forty-fourth Supplemental Indenture and any other indentures supplemental to the Original Indenture are herein collectively called the "Indenture" and this Forty-fourth Supplemental Indenture is hereinafter called "this Supplemental Indenture"); and Pursuant to the provisions of the Indenture, the Company has issued 50 series of bonds in the aggregate principal amount of $2,273,400,000, of which 29 series (including the Bonds of the 1977 Series issued pursuant to the Original Indenture) in the aggregate principal amount of $1,145,800,000 are no longer outstanding and of which additional portions, aggregating $36,875,000 in principal amount, of 4 other series have been retired; and The Company covenanted in and by the Original Indenture to execute and deliver such further instruments and do such further acts as may be necessary or proper to carry out more effectually the purposes of the Original Indenture and to make subject to the lien thereof property acquired after the execution and delivery of the Original Indenture; and Under Article 3 of the Original Indenture, the Company is authorized to issue additional bonds upon the terms and conditions expressed in the Original Indenture; and 6 3 The Company proposes to create one new series of First Mortgage Bonds to be designated as First Mortgage Bonds, 7 3/4% Series due 2020-A (hereinafter called the "Bonds of this Series"), with the denominations, rate of interest, date of maturity, redemption provisions and other provisions and agreements in respect thereof as in this Supplemental Indenture set forth; and The Bonds of this Series are to be issued by the Company and delivered to the Authority Trustee (hereinafter defined) to evidence and secure its obligation to pay to the Beaver County Industrial Development Authority (hereinafter called the "Authority") a portion of the Company's share of the purchase price for certain air and water pollution control facilities and sewage and solid waste disposal facilities used in connection with the operation of Beaver Valley Power Station Unit 2, a nuclear powered generating unit located in Shippingport, Pennsylvania (hereinafter called the "Project Facilities"), such portion being in an amount equal to the principal amount of the Authority Bonds (hereinafter defined) issued pursuant to the Beaver Valley Pollution Control Facilities Agreement dated as of April 1, 1974, among the Authority, the Company, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company and Pennsylvania Power Company; and That portion of the Company's share of the cost of the Project Facilities was originally financed with proceeds from the sale by the Authority of $35,000,000 principal amount of Beaver County Industrial Development Authority Pollution Control Revenue Bonds, 1985 Series B (The Toledo Edison Company Beaver Valley Project) (hereinafter called the "Prior Authority Bonds"). The Prior Authority Bonds are to be refunded from the proceeds of one series of Collateralized Pollution Control Revenue Refunding Bonds, Series 1995-A (The Toledo Edison Company Beaver Valley Project) (hereinafter called the "Authority Bonds") to be issued pursuant to a Trust Indenture, dated as of July 15, 1995 (hereinafter called the "Authority Trust Indenture"), between the Authority and Society National Bank, as trustee, (hereinafter called the "Authority Trustee"), and the Bonds of this Series are to be assigned by the Authority to the Authority Trustee as security for the payment of the principal of and premium, if any, and interest on the Authority Bonds and are to be delivered by the Company on behalf of the Authority directly to, and registered in the name of, the Authority Trustee; and The Company, by appropriate corporate action, has duly resolved and determined to execute this Supplemental Indenture for the purpose of providing for the creation of the Bonds of this Series and of specifying the form, provisions and particulars thereof as in said Original Indenture, as amended, 7 4 provided or permitted, including the issuance only of fully registered Bonds, and of giving to the Bonds of this Series the protection and security of the Indenture; and The text of the Bonds of this Series is to be substantially in the form following: [FORM OF BOND OF THIS SERIES] THE TOLEDO EDISON COMPANY FIRST MORTGAGE BOND, 7 3/4% SERIES DUE 2020-A DUE MAY 1, 2020 No. OA- $ THE TOLEDO EDISON COMPANY, an Ohio corporation (hereinafter called the Company), for value received, hereby promises to pay to , or registered assigns, the principal sum of Dollars or the aggregate unpaid principal amount hereof (as shown on the Schedule of Payments hereon), whichever is less, on May 1, 2020, at its office or agency in The City of New York, or, so long as the registered owner of this Bond is the Authority Trustee (hereinafter defined), at the agency of the Company in the City of Cleveland, State of Ohio, and semiannually on the same dates as interest is payable on the Authority Bonds (hereinafter defined; each such date hereinafter called an interest payment date) and to pay interest on the unpaid principal amount hereof to the registered owner hereof at said office or agencies at the rate per annum specified in the title of this Bond, until maturity, or, if this Bond shall be duly called for redemption, until the redemption date, or, if the Company shall default in the payment of the principal amount of this Bond, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the Indenture (hereinafter defined). Except as hereinafter provided, this Bond shall bear interest from the interest payment date next preceding the date of this Bond to which interest has been paid, unless this Bond is dated on an interest payment date, in which case from the date hereof; or unless this Bond is dated prior to the first interest payment date in respect hereof, in which case from July 15, 1995, and except that if this Bond is delivered on a transfer or exchange of or in substitution for one or more Bonds of this Series (hereinafter defined) it shall bear interest from the last preceding date to which interest shall have been paid on the Bond or Bonds of this Series in respect of which this Bond is delivered (except that if this Bond is dated between the record date (hereinafter defined) for any 8 5 interest payment date and such interest payment date, then from such interest payment date; provided, however, that if the Company shall default in the payment of interest due on such interest payment date, then from the next preceding interest payment date to which interest has been paid on the Bonds of this Series, or if such interest payment date is the first interest payment date for Bonds of this Series, then from July 15, 1995). The interest so payable on any interest payment date will, subject to certain exceptions provided in the Indenture, be paid to the person in whose name this Bond is registered at the close of business on the record date, which shall be the "Regular Record Date" as defined in the Authority Trust Indenture (hereinafter defined), applicable to the regular interest payment date of any Bond of this Series, if it were an "Interest Payment Date" as defined in the Authority Trust Indenture. Both the principal of and the interest on this Bond shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Bond is one of the Bonds of the Company, known as its First Mortgage Bonds, issued and to be issued in one or more series under and equally and ratably secured (except as any sinking, amortization, improvement or other fund, established in accordance with the provisions of the Indenture, may afford additional security for the Bonds of any particular series) by a certain Indenture of Mortgage and Deed of Trust, dated as of April 1, 1947 (hereinafter called the Original Indenture), made by the Company to The Chase National Bank of the City of New York (The Chase Manhattan Bank (National Association), successor), as Trustee (hereinafter called the Trustee), and by certain indentures supplemental thereto, including the Forty-fourth Supplemental Indenture dated as of July 14, 1995 (the Original Indenture and said indentures supplemental thereto herein collectively called the Indenture and said Forty-fourth Supplemental Indenture hereinafter called the Supplemental Indenture), to which Indenture reference is hereby made for a description of the property mortgaged, the nature and extent of the security, the rights and limitations of rights of the Company, the Trustee and the holders of said Bonds and of the coupons appurtenant to coupon Bonds under the Indenture and the terms and conditions upon which said Bonds are and are to be issued and secured, to all of the provisions of which Indenture and of all such supplemental indentures in respect of such security, including the provisions of the Indenture permitting the issue of Bonds of any series for property which, under the restrictions and limitations therein specified, may be subject to liens prior to the lien of the Indenture, the holder, by accepting this Bond, assents. To the extent permitted by and as provided in the Indenture, the rights 9 6 and obligations of the Company and of the holders of said Bonds and coupons (including those pertaining to any sinking or other fund) may be changed and modified, with the consent of the Company, by the holders of at least 75% in aggregate principal amount of the Bonds then outstanding, such percentage being determined as provided in the Indenture; provided, however, that in case such changes and modifications affect one or more but less than all series of Bonds then outstanding, they shall be required to be adopted only by the affirmative vote of the holders of at least 75% in aggregate principal amount of outstanding Bonds of such one or more series so affected; and further provided, that without the consent of the holder hereof no such change or modification shall be made which will extend the time of payment of the principal of, or of the interest or premium, if any, on this Bond or reduce the principal amount hereof or the rate of interest or the premium, if any, hereon, or affect any other modification of the terms of payment of such principal or interest, or premium, if any, or will permit the creation of any lien ranking prior to or on a parity with the lien of the Indenture on any of the mortgaged property, or will deprive the holder hereof of the benefit of a lien upon the mortgaged property for the security of this Bond, or will reduce the percentage of Bonds required for the adoption of changes or modifications as aforesaid. This Bond is one of a series of Bonds designated as the First Mortgage Bonds, 7 3/4% Series due 2020-A, of the Company (herein called Bonds of this Series) limited, except as otherwise provided in the Indenture, in aggregate principal amount to $35,000,000 and issued under and secured by the Supplemental Indenture. The Bonds of this Series have been issued by the Company and delivered to the Authority Trustee to evidence and secure its obligation to pay to the Beaver County Industrial Development Authority (hereinafter called the Authority) a portion of the Company's share of the purchase price for certain air and water pollution control facilities and sewage and solid waste disposal facilities used in connection with the operation of Beaver Valley Power Station Unit 2, a nuclear powered generating unit located in Shippingport, Pennsylvania (hereinafter called the Project Facilities), such portion being in an amount equal to the principal of the Authority Bonds issued pursuant to the Beaver Valley Pollution Control Facilities Agreement dated as of April 1, 1974, among the Authority, the Company, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company and Pennsylvania Power Company. That portion of the Company's share of the cost of the Project Facilities was originally financed with proceeds from the sale by the Authority of certain bonds, which were refunded from the proceeds of one series of Collateralized Pollution Control Revenue Refunding Bonds, Series 10 7 1995-A (The Toledo Edison Company Beaver Valley Project) (herein called the Authority Bonds) issued pursuant to a Trust Indenture, dated as of July 15, 1995 (herein called the Authority Trust Indenture), between the Authority and Society National Bank, as trustee, (herein called the Authority Trustee). The Bonds of this Series have been assigned by the Authority to the Authority Trustee as security for the payment of the principal of and premium, if any, and interest on the Authority Bonds and have been delivered by the Company on behalf of the Authority directly to, and registered in the name of, the Authority Trustee. In the event any Authority Bonds shall be surrendered to the Authority Trustee or other person for cancellation pursuant to the Authority Trust Indenture (except upon exchange for other Authority Bonds), Bonds of this Series equal in principal amount to such Authority Bonds shall be deemed to have been paid, but only when and to the extent (a) so noted on the Schedule of Payments hereon by one of the agencies of the Company hereinabove specified and (if such agency is not the Trustee) written notice by such agency of such notation has been received by the Trustee or (b) such Bond is surrendered to and cancelled by the Trustee as provided in the next paragraph; and in the event and to the extent the principal of (or premium, if any) or interest on any Authority Bonds shall be paid or deemed to be paid, an equal amount of principal (or premium, if any) or interest, as the case may be, payable with respect to an aggregate principal amount of Bonds of this Series equal to the aggregate principal amount of such Authority Bonds shall be deemed to have been paid, but, in the case of such payment of principal, only when and to the extent (i) so noted on the Schedule of Payments hereon by one of the agencies of the Company hereinabove specified and (if such agency is not the Trustee) written notice by such agency of such notation has been received by the Trustee or (ii) this Bond is surrendered to and cancelled by the Trustee as provided in the next paragraph. When any such payment of principal of this Bond is made, this Bond shall be surrendered by the registered owner hereof to an agency of the Company for such notation and notification or to the Trustee for cancellation. In the event that this Bond shall be deemed to have been paid in full, this Bond shall be surrendered to the Trustee for cancellation. In the event that this Bond shall be deemed to have been paid in part, this Bond may, at the option of the registered owner, be surrendered to the Trustee for cancellation, in which event the Trustee shall cancel this Bond and the Company shall execute and the Trustee shall authenticate and deliver Bonds of this Series in autho- 11 8 rized denominations in aggregate principal amount equal to the unpaid balance of the principal amount of this Bond. The Bonds of this Series are subject to mandatory redemption by the Company prior to maturity, upon not less than 30 days prior notice, in whole or in part at any time, all as more fully provided in Section 1 of Article II of the Supplemental Indenture, in the event the Company exercises its option to direct the redemption of Authority Bonds pursuant to Section 4.01(a) of the Authority Trust Indenture, and an equivalent principal amount of Authority Bonds are being concurrently called for redemption, at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date fixed for redemption. The Bonds of this Series are also subject to mandatory redemption by the Company prior to maturity at any time (a) in whole upon notice of the occurrence of an event of default under the Authority Trust Indenture and of the acceleration of the payment of the principal of the Authority Bonds or (b) in whole or in part upon a final determination by any federal judicial or administrative authority that interest on the Authority Bonds is includable for federal income tax purposes in the gross income of the holders of the Authority Bonds (other than because a holder is a "substantial user" of the Project Facilities or a "related person" thereof, as those terms are used in Section 147(a) of the Internal Revenue Code of 1986, as amended) and an equivalent amount of Authority Bonds are being concurrently called for redemption, in each case as provided in Section 2 of Article II of the Supplemental Indenture, at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date fixed for redemption. The Bonds of this Series are also subject to mandatory redemption by the Company prior to stated maturity, all as more fully provided in Section 1 of Article II of the Supplemental Indenture, in whole or in part, on any date on or after November 1, 2005, in the event that and to the extent that the Company exercises its option to direct the redemption of Authority Bonds pursuant to the Authority Trust Indenture, and an equivalent principal amount of Authority 12 9 Bonds are being concurrently called for redemption, at redemption prices, plus accrued and unpaid interest if any, to the redemption date as follows:
REDEMPTION PRICE (EXPRESSED AS A PERCENTAGE REDEMPTION PERIODS OF THE PRINCIPAL AMOUNT (DATES INCLUSIVE) BEING REDEEMED) ---------------------------------------------------------------- November 1, 2005 through October 31, 2006 102 % November 1, 2006 through October 31, 2007 101 November 1, 2007 and thereafter 100
Any redemption of the Bonds of this Series shall be made in accordance with the applicable provisions of Sections 5.02, 5.03, 5.04 and 5.05 of the Original Indenture, unless and to the extent waived in writing by the registered owner or owners of all Bonds of this Series and such waiver is filed with the Trustee. If this Bond shall be called for redemption and payment of the redemption price shall be duly provided by the Company as specified in the Indenture, interest shall cease to accrue hereon from and after the date of redemption fixed in the notice thereof. The principal of this Bond may be declared or may become due before the maturity hereof, on the conditions, in the manner and at the times set forth in the Indenture, upon the happening of a default as therein defined. This Bond is transferable by the registered owner hereof in person or by his or her duly authorized attorney at the office or agency of the Company in The City of New York, upon surrender and cancellation of this Bond, and thereupon a new fully registered Bond or Bonds of this Series and maturity, for the same aggregate principal amount, in authorized denominations, will be issued to the transferee in exchange therefor, as provided in the Indenture. The Company and the Trustee and any paying agent may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment and for all other purposes. This Bond, alone or with other Bonds of this Series and maturity, may in like manner be exchanged at such office or agency for one or more new fully registered Bonds of this Series and maturity, in authorized denominations, of the same aggregate principal amount. Upon each such transfer, exchange and re-exchange, the Company will not require the payment of any charges, other than for any tax or other governmental charge required to be paid by the Company in connection therewith. In the event less than all of the Bonds of this Series at the time 13 10 outstanding are called for redemption, the Company shall not be required (a) to register any transfer or make any exchange of any such Bond for a period of 15 days before the mailing of the notice of redemption of any such Bond, (b) to register any transfer or make any exchange of any such Bond so called for redemption in its entirety, or (c) to register any transfer or make any exchange of any portion of any such Bond so called for redemption. No recourse under or upon any covenant or obligation of the Indenture, or of any indenture supplemental thereto, or of this Bond, for the payment of the principal of or the interest on this Bond, or for any claim based thereon, or otherwise in any manner in respect thereof, shall be had against any incorporator, subscriber to the capital stock, stockholder, officer or director, as such, of the Company, whether former, present or future, either directly, or indirectly through the Company or any predecessor or successor corporation or the Trustee, by the enforcement of any subscription to capital stock, assessment or otherwise, or by any legal or equitable proceeding by virtue of any constitution, statute, or otherwise (including, without limiting the generality of the foregoing, any proceeding to enforce any claimed liability of stockholders of the Company based upon any theory of disregarding the corporate entity of the Company or upon any theory that the Company was acting as the agent or instrumentality of the stockholders), any and all such liability of incorporators, stockholders, subscribers, officers and directors, as such, being released by the holder hereof, by the acceptance of this Bond, and being likewise waived and released by the terms of the Indenture. This Bond shall not be valid or become obligatory for any purpose until the certificate of authentication endorsed hereon shall have been signed by The Chase Manhattan Bank (National Association) or its successor, as Trustee under the Indenture. 14 11 IN WITNESS WHEREOF, THE TOLEDO EDISON COMPANY has caused this Bond to be signed in its name by its President or a Vice-President, manually or in facsimile, and its corporate seal to be impressed or imprinted hereon and attested by a manual or facsimile signature of its Secretary or an Assistant Secretary. Dated THE TOLEDO EDISON COMPANY By Vice President. Attest: Secretary. 15 12 [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Bond is one of the Bonds of the series designated herein, described in the within-mentioned Indenture. THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), AS TRUSTEE By Authorized Officer. [FORM OF SCHEDULE OF PAYMENTS] SCHEDULE OF PAYMENTS
AGENCY OF THE UNPAID COMPANY PRINCIPAL PRINCIPAL PREMIUM INTEREST MAKING AUTHORIZED DATE PAYMENT AMOUNT PAYMENT PAYMENT NOTATION OFFICER TITLE - ------------ ---------- ---------- -------- --------- ---------- ----------- ------
[END OF FORM OF BOND OF THIS SERIES] 16 13 All conditions and requirements necessary to make this Supplemental Indenture a valid, legal and binding instrument in accordance with its terms and to make the Bonds of this Series, when duly executed by the Company and authenticated and delivered by the Trustee, and duly issued, the valid, binding and legal obligations of the Company, have been done and performed, and the execution and delivery of this Supplemental Indenture have been in all respects duly authorized; NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That The Toledo Edison Company, the Company herein named, in consideration of the premises and of One Dollar ($1.00) to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, does hereby covenant and agree to and with the Trustee and its successors in the trust under the Indenture, for the benefit of those who shall hold the bonds to be issued hereunder and thereunder, as hereinafter provided, as follows: ARTICLE I CREATION AND DESCRIPTION OF BONDS OF THIS SERIES SECTION 1. A new series of bonds to be issued under and secured by the Indenture is hereby created, to be designated as First Mortgage Bonds, 7 3/4% Series due 2020-A (such bonds herein referred to as the "Bonds of this Series"). The Bonds of this Series shall be limited to an aggregate principal amount of $35,000,000, excluding any Bonds of this Series which may be authenticated in exchange for or in lieu of or in substitution for or on transfer of other Bonds of this Series pursuant to any provisions of the Original Indenture or of this Supplemental Indenture. The Bonds of this Series shall be substantially in the form hereinbefore recited. SECTION 2. All Bonds of this Series shall mature May 1, 2020 and shall bear interest from July 15, 1995 at the rate of 7 3/4% per annum payable semiannually on the same dates as interest is payable on the Authority Bonds. SECTION 3. Both principal and interest shall be payable, so long as the registered owner of the Bonds of this Series is the Authority Trustee, at the agency of the Company in the City of Cleveland, State of Ohio, but if and when the registered owner of the Bonds of this Series is not the Authority Trustee, shall be payable at the office or agency of the Company in The City of New York; and both principal and interest shall be payable in any coin or 17 14 currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 4. The Bonds of this Series shall be issued only as fully registered Bonds in denominations of $100,000 and any integral multiple thereof. SECTION 5. Bonds of this Series shall be transferable and exchangeable for other Bonds of the same series at the office or agency of the Company in The City of New York, in the manner and upon the terms set forth in sec. 2.05 of the Original Indenture, but notwithstanding the provisions of sec. 2.08 of the Original Indenture, no charge shall be made upon any transfer or exchange of Bonds of said series other than for any tax or taxes or other governmental charge required to be paid by the Company. In the event less than all of the Bonds of this Series at the time outstanding are called for redemption, the Company shall not be required (a) to register any transfer or make any exchange of any such Bond for a period of 15 days before the mailing of the notice of redemption of any such Bond, (b) to register any transfer or make any exchange of any such Bond so called for redemption in its entirety, or (c) to register any transfer or make any exchange of any portion of any such Bond so called for redemption. SECTION 6. The person in whose name any Bond of this Series is registered at the close of business on any record date (as defined in the text of the Form of Bond of this Series set forth in this Supplemental Indenture) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such registered Bond upon any transfer or exchange thereof subsequent to the record date and prior to such interest payment date, except if and to the extent the Company shall default in the payment of the interest due on such interest payment date, in which case such defaulted interest shall be paid to the person in whose name such Bond (or any Bond or Bonds of this Series issued, directly or after intermediate transactions, upon transfer or exchange or in substitution thereof) is registered on the date of payment of such defaulted interest or on a subsequent record date for such payment if one shall have been established as hereinafter provided. A subsequent record date may be established by the Company by notice mailed to the holders of Bonds of this Series not less than 10 days preceding such record date, which record date shall be not more than 15 days prior to the subsequent interest payment date. 18 15 SECTION 7. Except as provided in this Article I, every Bond of this Series shall be dated and shall bear interest as provided in sec. 2.04 of the Original Indenture; provided, however, that, so long as there is no existing default in the payment of interest on said Bonds, the holder of any Bond of this Series authenticated by the Trustee between the record date for any interest payment date and such interest payment date shall not be entitled to the payment of the interest due on such interest payment date and shall have no claim against the Company with respect thereto; provided, further, that, if and to the extent the Company shall default in the payment of the interest due on such interest payment date, then any such Bond shall bear interest from the interest payment date next preceding the date of such Bond to which interest has been paid or, if the Company shall be in default with respect to the interest due on the first interest payment date of such Bond, then from July 15, 1995. SECTION 8. The Bonds of this Series may be executed by the Company and delivered to the Trustee and, upon compliance with all applicable provisions and requirements of the Original Indenture in respect thereof, shall be authenticated by the Trustee and delivered (without awaiting the filing or recording of this Supplemental Indenture) in accordance with the written order or orders of the Company. ARTICLE II REDEMPTION OF BONDS OF THIS SERIES SECTION 1. The Bonds of this Series shall, in the manner provided in Article 5 of the Original Indenture, be subject to redemption by the Company prior to maturity, as follows: (a) In the event the Company exercises its option to direct the redemption of Authority Bonds upon the occurrence of any of the events described in Section 4.01(a) of the Authority Trust Indenture, in whole or in part, in each case at a redemption price of 100% of the principal amount, plus accrued interest to the date fixed for redemption; or (b) In whole or in part on any date on or after November 1, 2005, in the event that and to the extent that the Company exercises its option to direct the redemption of Authority Bonds pursuant to Section 4.01(c) of the Authority Trust Indenture, at redemption prices equal to the following percentages of the principal amount to be redeemed, plus accrued interest to the date fixed for redemption: 19 16
REDEMPTION PRICE (EXPRESSED AS A PERCENTAGE REDEMPTION PERIODS OF THE PRINCIPAL AMOUNT (DATES INCLUSIVE) BEING REDEEMED) ---------------------------------------------------------------- November 1, 2005 through October 31, 2006................................... 102 % November 1, 2006 through October 31, 2007................................... 101 November 1, 2007 and thereafter.......... 100
Any redemption under this Section 1 shall occur only upon receipt by the Trustee of a certificate of the Company to the effect that (i) the Company has given notice to the Authority Trustee that the Company is exercising its option to direct redemption of Authority Bonds as provided in Section 4.01(a) or 4.01(c) of the Authority Trust Indenture and (ii) an equivalent principal amount of Authority Bonds are being currently called for redemption. Such certificate shall specify the principal amount of the Bonds of this Series to be redeemed, shall have attached to it a copy of said notice to the Authority Trustee and shall specify the redemption date of such Bonds of this Series, which redemption date shall not be less than 45 days from the date of the Trustee's receipt of such certificate and shall be the same as the redemption date specified in the attached notice for the Authority Bonds being concurrently redeemed. SECTION 2.(a) The Bonds of this Series shall be subject to mandatory redemption by the Company in whole at any time prior to maturity if the Trustee shall receive a written demand from the Authority Trustee for redemption of all Bonds of this Series held by the Authority Trustee, stating that an "event of default" under the Authority Trust Indenture has occurred and is continuing and that payment of the principal of the Authority Bonds has been accelerated; provided, however, that the Bonds of this Series shall not be redeemed under this Section 2(a) in the event that prior to the date fixed for redemption: (i) the Trustee shall have received a certificate of the Authority Trustee (a) stating that there has been a waiver of such acceleration or (b) withdrawing said written demand, or (ii) if an event of default under Section 9.01 of Article 9 of the Original Indenture shall have occurred and be continuing, there has been an acceleration of the principal of the Bonds of this Series. Any such redemption shall be made on a date selected by the Company not more than 45 days after receipt of the written demand at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date fixed for redemption. 20 17 (b) The Bonds of this Series shall also be subject to special mandatory redemption by the Company in whole or in part at any time at a redemption price of 100% of the principal amount thereof, plus accrued interest to the date fixed for redemption, at the earliest practicable date selected by the Authority Trustee, after consultation with the Company, but in any event no later than 180 days following the Authority Trustee's notification of a Determination of Taxability (as defined in the Authority Trust Indenture). Any special mandatory redemption hereunder shall be made only upon receipt by the Trustee of a certificate of the Company to the effect that the Company is delivering moneys to redeem Bonds of this Series in order to provide the Authority Trustee with the moneys needed to redeem Authority Bonds in accordance with Section 4.01(b) of the Authority Trust Indenture. Such certificate shall specify the principal amount of Authority Bonds to be redeemed and the redemption date of the Bonds of this Series, which date shall be the same as the redemption date for the Authority Bonds being concurrently redeemed. SECTION 3. The provisions of sec.5.02, sec.5.03, sec.5.04 and sec.5.05 of the Original Indenture shall be applicable to Bonds of this Series, provided that upon deposit with the Trustee of money to redeem Bonds of this Series, such money shall be immediately available for payment. SECTION 4. The holder of each and every Bond of this Series issued hereunder hereby agrees to accept payment thereof prior to maturity on the terms and conditions provided for in this Article II. ARTICLE III PAYMENT DEEMED MADE OF BONDS OF THIS SERIES SECTION 1. In the event any Authority Bonds shall be purchased by the Company and surrendered by it to the Authority Trustee for cancellation or shall be otherwise surrendered to the Authority Trustee for cancellation pursuant to the Authority Trust Indenture (except upon exchange for other Authority Bonds), Bonds of this Series equal in principal amount and maturity to the Authority Bonds so surrendered shall be deemed to have been paid, but only when and to the extent that (a) such payment of the principal amount of such Bonds of this Series shall be noted by an agency of the Company on the Schedule of Payments on such Bonds of this Series and (if such agency is not the Trustee) written notice by such agency of such notation shall have been received by the Trustee or (b) such Bonds of this Series shall have been 21 18 surrendered to and cancelled by the Trustee as provided in Section 3 of this Article III. SECTION 2. In the event and to the extent the principal of or premium, if any, or interest on any Authority Bonds shall be paid out of funds held by the Authority Trustee or out of any other funds or shall otherwise be deemed to be paid, an equal amount of principal of or premium, if any, or interest on, as the case may be, Bonds of this Series shall be deemed to have been paid, but in the case of such payments of principal on such Bonds of this Series, only when and to the extent that (a) such payment of the principal amount of such Bonds of this Series shall be noted by an agency of the Company on the Schedule of Payments on such Bonds of this Series and (if such agency is not the Trustee) written notice by such agency of such notation shall have been received by the Trustee or (b) such Bonds of this Series shall have been surrendered to and cancelled by the Trustee as provided in Section 3 of this Article III. SECTION 3. When payment of any principal amount of a Bond of this Series shall be deemed to have been made as provided in Section 1 or 2 of this Article III, the registered owner thereof shall surrender such Bond to an agency of the Company for notation and notification or to the Trustee for cancellation as provided in said Section. All Bonds of this Series which shall be deemed to have been paid in full as provided in said Section 1 or 2 shall be surrendered to the Trustee for cancellation and the Trustee shall forthwith cancel the same. In the event that part of a Bond of this Series shall be deemed to have been paid as provided in said Section 1 or 2, the registered owner may at its option surrender such Bond to the Trustee for cancellation, in which event the Trustee shall cancel such Bond and the Company shall execute and the Trustee shall authenticate and deliver, without charge to the registered owner, Bonds of this Series in such authorized denominations as shall be specified by the registered owner in an aggregate principal amount equal to the unpaid balance of the principal amount of such surrendered Bond. ARTICLE IV THE TRUSTEE SECTION 1. The Trustee accepts the trusts created by this Supplemental Indenture upon the terms and conditions in the Original Indenture and in this Supplemental Indenture set forth. The recitals in this Supplemental Indenture are made by the Company only and not by the Trustee. Each and every term and condition contained in Article 13 of the Original Indenture shall apply to 22 19 this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture. SECTION 2. The Company shall cause any agency of the Company, other than the Trustee, which it may appoint from time to time to act as such agency in respect of the Bonds of this Series, to execute and deliver to the Trustee an instrument in which such agency shall: (a) Agree to keep and maintain, and furnish to the Trustee from time to time as reasonably requested by the Trustee, appropriate records of all transactions carried out by it as such agency and to furnish the Trustee such other information and reports as the Trustee may reasonably require; and (b) Certify that it is eligible for appointment as such agency and agree to notify the Trustee promptly if it shall cease to be so eligible; provided, however, that the Company, in lieu of causing any such agency to furnish such an instrument, may make such other arrangements with the Trustee in respect of any such agency as shall be satisfactory to the Trustee. SECTION 3. The Trustee shall advise the Company, promptly, in writing of the notation or receipt of written notice of notation on or cancellation of any Bond of this Series provided for in Article III of this Supplemental Indenture. ARTICLE V MISCELLANEOUS PROVISIONS SECTION 1. The Original Indenture, as heretofore supplemented, is in all respects ratified and confirmed, and the Original Indenture, this Supplemental Indenture and all other indentures supplemental to the Original Indenture shall be read, taken and construed as one and the same instrument. Neither the execution of this Supplemental Indenture nor anything herein contained shall be construed to impair the lien of the Indenture on any of the property subject thereto, and such lien shall remain in full force and effect as security for all bonds now outstanding or hereafter issued under the Indenture. All covenants and provisions of the Original Indenture, except as modified by this Supplemental Indenture and all other indentures supplemental to the Original Indenture, shall continue in full force and effect for the respective periods of 23 20 time therein specified, and this Supplemental Indenture shall form part of the Indenture. All terms defined in Article 1 of the Original Indenture shall, for all purposes of this Supplemental Indenture, have the meanings in said Article 1 specified, except as modified by this Supplemental Indenture and all other indentures supplemental to the Original Indenture and unless the context otherwise requires. SECTION 2. This Supplemental Indenture may be simultaneously executed in any number of counterparts, and all said counterparts executed and delivered, each as an original, shall constitute but one and the same instrument. IN WITNESS WHEREOF, The Toledo Edison Company has caused its corporate name to be hereunto affixed, this instrument to be signed by its President or a Vice President and its corporate seal to be hereunto affixed and attested by its Secretary or an Assistant Secretary for and in its behalf and The Chase Manhattan Bank (National Association), as Trustee, in evidence of its acceptance of the trust hereby created, has caused its corporate name to be hereunto affixed, this instrument to be signed by its President or a Vice President and its corporate seal to be hereunto affixed and attested by its Secretary, an Assistant Secretary or a Corporate Trust Officer, for and in its behalf, all as of the day and year first above written. 24 S-1 THE TOLEDO EDISON COMPANY By G.R. LEIDICH Vice President [SEAL] Attest: J.T. PERCIO Secretary Signed, sealed and acknowledged on behalf of The Toledo Edison Company in the presence of PATRICIA BARKEY Patricia Barkey SONDRA CLARKE Sondra Clarke As witnesses THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Trustee, By VALERIE DUNBAR Vice President Attest: KATHLEEN PERRY Corporate Trust Officer Signed, sealed and acknowledged on behalf of The Chase Manhattan Bank (National Association) in the presence of ELSIE TASSINI Elsie Tassini LYNN M. FITZPATRICK Lynn M. Fitzpatrick As witnesses [SEAL] 25 S-2 STATE OF OHIO ) COUNTY OF CUYAHOGA ) ss: On this 19th day of July, 1995, before me personally appeared GARY R. LEIDICH and J. T. PERCIO to me personally known, who being by me severally duly sworn, did say that they are a Vice President and the Secretary, respectively, of The Toledo Edison Company, that the seal affixed to the foregoing instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said corporation. AMY B. MCCABE Notary Public Amy B. McCabe Notary Public, State of Ohio Recorded in Cuyahoga County My commission expires October 23, 1999 STATE OF NEW YORK ) [SEAL] COUNTY OF NEW YORK ) ss: On this 20th day of July, 1995, before me personally appeared VALERIE DUNBAR and KATHLEEN PERRY to me personally known, who being by me severally duly sworn, did say that they are a Vice President and a Corporate Trust Officer, respectively, of The Chase Manhattan Bank (National Association), that the seal affixed to the foregoing instrument is the corporate seal of said association and that said instrument was signed and sealed in behalf of said association by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said association. MARGARET M. PRICE Notary Public Margaret M. Price Notary Public, State of New York No. 24-4980599 Qualified in Kings County Commission Expires April 22, 1997 [SEAL] THIS INSTRUMENT PREPARED BY BRUCE T. ROSENBAUM, ATTORNEY AT LAW. 26 R-1 This page contains information as to recording and filing which was not set forth in this Supplemental Indenture at the time of execution. This page is not a part of this Supplemental Indenture. RECORDING AND FILING DATA This Supplemental Indenture was filed for record and recorded in the record of mortgages in the offices of the Recorders of the following Counties:
FILED FOR COUNTY VOLUME PAGE(S) RECORD - ------------------------- ---------- ------------ --------------------- Ohio Belmont................ 640 910 July 28, 1995 Defiance............... 325 897 July 28, 1995 Erie................... 231 889 July 28, 1995 Fulton................. 330 847 July 28, 1995 Henry.................. 270 1145 July 28, 1995 Lake................... 1140 694 July 28, 1995 Monroe................. 14 847 July 28, 1995 Ottawa................. 458 806 July 28, 1995 Paulding............... 293 520 July 28, 1995 Putnam................. 581 107 July 28, 1995 Sandusky............... 481 245 July 28, 1995 Seneca................. 514 9 July 28, 1995 Williams............... 351 941 July 28, 1995 Wood................... 1018 415 July 28, 1995 Pennsylvania Beaver................. 1378 927 July 28, 1995
MICROFICHE ------------------------------ Lucas, Ohio.......... 95-1488C03 July 28, 1995
An amendment to a previously filed financing statement and a counterpart of this Supplemental Indenture were filed in the office of the Secretary of the Commonwealth of Pennsylvania on July 28, 1995 under original or amendment file number 07851362, microfilm number 24521576, to comply with the filing requirements of the Pennsylvania enactment of the Uniform Commercial Code. EX-4.G 10 EXHIBIT 4.G 1 Exhibit 4(g) [CONFORMED] - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE TOLEDO EDISON COMPANY TO THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), TRUSTEE. ------------------------ FORTY-FIFTH SUPPLEMENTAL INDENTURE DATED AS OF JULY 15, 1995 ------------------------ (SUPPLEMENTAL TO INDENTURE DATED AS OF APRIL 1, 1947) ------------------------ FIRST MORTGAGE BONDS, 7 3/4% SERIES DUE 2020-B - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- 2 TABLE OF CONTENTS
PAGE --------- PARTIES.................................................. 1 RECITALS................................................. 1 FORM OF BOND OF THIS SERIES.............................. 4 GRANTING CLAUSES......................................... 13 ARTICLE I CREATION AND DESCRIPTION OF BONDS OF THIS SERIES SECTION 1. Creation of Bonds of this Series, limit on amount issuable........................... 13 SECTION 2. Interest Rates, Computation and Payment Dates..................................... 13 SECTION 3. Place and coin of payment................... 13 SECTION 4. Denominations............................... 14 SECTION 5. Transfer and Exchange....................... 14 SECTION 6. Record date for payment of interest......... 14 SECTION 7. Date of Bonds of this Series................ 15 SECTION 8. Authentication of Bonds of this Series by Trustee................................ 15 ARTICLE II REDEMPTION OF BONDS OF THIS SERIES SECTION 1. Bonds of this Series redeemable............. 15 SECTION 2. Mandatory redemption provisions............. 16 SECTION 3. Certain provisions of Original Indenture applicable to redemption of Bonds of this Series.................................... 17 SECTION 4. Bondholder agrees to accept payment of Bonds of this Series redeemed prior to maturity.................................. 17
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PAGE --------- ARTICLE III PAYMENT DEEMED MADE OF BONDS OF THIS SERIES SECTION 1. Upon surrender of Authority Bonds purchased................................. 17 SECTION 2. Upon payment of Authority Bonds............. 18 SECTION 3. Surrender and cancellation of Bonds of this Series.................................... 18 ARTICLE IV THE TRUSTEE SECTION 1. The Trustee accepts trust created by Forty-fifth Supplemental Indenture........ 18 SECTION 2. Agency of the Company other than the Trustee................................... 19 SECTION 3. Trustee advises Company of notations provided for in Article III............... 19 ARTICLE V MISCELLANEOUS PROVISIONS SECTION 1. Ratification and approval of Original Indenture as supplemented................. 19 Covenants of Original Indenture, except as modified, continue in effect.............. 19 SECTION 2. Forty-fifth Supplemental Indenture may be executed in counterparts.................. 20 TESTIMONIUM CLAUSE....................................... 20 SIGNATURES AND SEALS..................................... S-1 ACKNOWLEDGMENTS.......................................... S-2 RECORDING AND FILING DATA................................ R-1
4 FORTY-FIFTH SUPPLEMENTAL INDENTURE, dated as of July 15, 1995, between THE TOLEDO EDISON COMPANY, a corporation organized and existing under the laws of the State of Ohio (hereinafter called the "Company"), and THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), a national banking association existing under the laws of the United States of America, with its head office at 1 Chase Manhattan Plaza, The City of New York (hereinafter called the "Trustee"), as Trustee. RECITALS The Company has heretofore executed and delivered an Indenture of Mortgage and Deed of Trust dated as of April 1, 1947 (hereinafter referred to as the "Original Indenture") to The Chase National Bank of the City of New York, predecessor Trustee, to secure an issue of First Mortgage Bonds of the Company, issuable in series, and created thereunder an initial series of bonds designated as First Mortgage Bonds, 2 7/8% Series due 1977, being the initial series of bonds issued under the Original Indenture; and The Company has heretofore executed and delivered to The Chase National Bank of the City of New York, predecessor Trustee, four Supplemental Indentures supplementing the Original Indenture dated, respectively, September 1, 1948, April 1, 1949, December 1, 1950 and March 1, 1954 and has heretofore executed and delivered to The Chase Manhattan Bank, which on March 31, 1955, became the Trustee under the Original Indenture by virtue of the merger of The Chase National Bank of the City of New York into President and Directors of The Manhattan Company under the name of The Chase Manhattan Bank, the Fifth and the Sixth Supplemental Indentures dated, respectively, February 1, 1956, and May 1, 1958, supplementing the Original Indenture; and The Chase Manhattan Bank was converted into a national banking association under the name The Chase Manhattan Bank (National Association), effective September 23, 1965; and by virtue of said conversion the continuity of the business of The Chase Manhattan Bank, including its business of acting as corporate trustee, and its corporate existence, have not been affected, so that The Chase Manhattan Bank (National Association) is vested with all the trusts, powers, discretion, immunities, privileges and all other matters as were vested in said The Chase Manhattan Bank under the Indenture, with like effect as if originally named as Trustee therein; and 5 2 The Company has heretofore executed and delivered to the Trustee 38 Supplemental Indentures dated, respectively, as follows: Seventh, August 1, 1967, Eighth, November 1, 1970, Ninth, August 1, 1972, Tenth, November 1, 1973, Eleventh, July 1, 1974, Twelfth, October 1, 1975, Thirteenth, June 1, 1976, Fourteenth, October 1, 1978, Fifteenth, September 1, 1979, Sixteenth, September 1, 1980, Seventeenth, October 1, 1980, Eighteenth, April 1, 1981, Nineteenth, November 1, 1981, Twentieth, June 1, 1982, Twenty-first, September 1, 1982, Twenty-second, April 1, 1983, Twenty-third, December 1, 1983, Twenty-fourth, April 1, 1984, Twenty-fifth, October 15, 1984, Twenty-sixth, October 15, 1984, Twenty-seventh, August 1, 1985, Twenty-eighth, August 1, 1985, Twenty-ninth, December 1, 1985, Thirtieth, March 1, 1986, Thirty-first, October 15, 1987, Thirty-second, September 15, 1988, Thirty-third, June 15, 1989, Thirty-fourth, October 15, 1989, Thirty-fifth, May 15, 1990, Thirty-sixth, March 1, 1991, Thirty-seventh, May 1, 1992, Thirty-eighth, August 1, 1992, Thirty-ninth, October 1, 1992, Fortieth, January 1, 1993, Forty-first, September 15, 1994, Forty-second, May 1, 1995, Forty-third, June 1, 1995 and Forty-fourth, July 14, 1995 supplementing the Original Indenture (The Original Indenture, all the aforementioned Supplemental Indentures, this Forty-fifth Supplemental Indenture and any other indentures supplemental to the Original Indenture are herein collectively called the "Indenture" and this Forty-fifth Supplemental Indenture is hereinafter called "this Supplemental Indenture"); and Pursuant to the provisions of the Indenture, the Company has issued 51 series of bonds in the aggregate principal amount of $2,308,400,000, of which 30 series (including the Bonds of the 1977 Series issued pursuant to the Original Indenture) in the aggregate principal amount of $1,145,800,000 are no longer outstanding and of which additional portions, aggregating $36,875,000 in principal amount, of 4 other series have been retired; and The Company covenanted in and by the Original Indenture to execute and deliver such further instruments and do such further acts as may be necessary or proper to carry out more effectually the purposes of the Original Indenture and to make subject to the lien thereof property acquired after the execution and delivery of the Original Indenture; and Under Article 3 of the Original Indenture, the Company is authorized to issue additional bonds upon the terms and conditions expressed in the Original Indenture; and 6 3 The Company proposes to create one new series of First Mortgage Bonds to be designated as First Mortgage Bonds, 7 3/4% Series due 2020-B (hereinafter called the "Bonds of this Series"), with the denominations, rate of interest, date of maturity, redemption provisions and other provisions and agreements in respect thereof as in this Supplemental Indenture set forth; and The Bonds of this Series are to be issued by the Company and delivered to the Authority Trustee (hereinafter defined) to evidence and secure its obligation to pay to the Beaver County Industrial Development Authority (hereinafter called the "Authority") a portion of the Company's share of the purchase price for certain air and water pollution control facilities and sewage and solid waste disposal facilities used in connection with the operation of Beaver Valley Power Station Unit 2, a nuclear powered generating unit located in Shippingport, Pennsylvania (hereinafter called the "Project Facilities"), such portion being in an amount equal to the principal amount of the Authority Bonds (hereinafter defined) issued pursuant to the Beaver Valley Pollution Control Facilities Agreement dated as of April 1, 1974, among the Authority, the Company, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company and Pennsylvania Power Company; and That portion of the Company's share of the cost of the Project Facilities was originally financed with proceeds from the sale by the Authority of $19,000,000 principal amount of Beaver County Industrial Development Authority Pollution Control Revenue Bonds, 1985 Series C (The Toledo Edison Company Beaver Valley Project) (hereinafter called the "Prior Authority Bonds"). The Prior Authority Bonds are to be refunded from the proceeds of one series of Collateralized Pollution Control Revenue Refunding Bonds, Series 1995-B (The Toledo Edison Company Beaver Valley Project) (hereinafter called the "Authority Bonds") to be issued pursuant to a Trust Indenture, dated as of July 15, 1995 (hereinafter called the "Authority Trust Indenture"), between the Authority and Society National Bank, as trustee, (hereinafter called the "Authority Trustee"), and the Bonds of this Series are to be assigned by the Authority to the Authority Trustee as security for the payment of the principal of and premium, if any, and interest on the Authority Bonds and are to be delivered by the Company on behalf of the Authority directly to, and registered in the name of, the Authority Trustee; and The Company, by appropriate corporate action, has duly resolved and determined to execute this Supplemental Indenture for the purpose of providing for the creation of the Bonds of this Series and of specifying the form, provisions and particulars thereof as in said Original Indenture, as amended, 7 4 provided or permitted, including the issuance only of fully registered Bonds, and of giving to the Bonds of this Series the protection and security of the Indenture; and The text of the Bonds of this Series is to be substantially in the form following: [FORM OF BOND OF THIS SERIES] THE TOLEDO EDISON COMPANY FIRST MORTGAGE BOND, 7 3/4% SERIES DUE 2020-B DUE MAY 1, 2020 No. OA- $ THE TOLEDO EDISON COMPANY, an Ohio corporation (hereinafter called the Company), for value received, hereby promises to pay to , or registered assigns, the principal sum of Dollars or the aggregate unpaid principal amount hereof (as shown on the Schedule of Payments hereon), whichever is less, on May 1, 2020, at its office or agency in The City of New York, or, so long as the registered owner of this Bond is the Authority Trustee (hereinafter defined), at the agency of the Company in the City of Cleveland, State of Ohio, and semiannually on the same dates as interest is payable on the Authority Bonds (hereinafter defined; each such date hereinafter called an interest payment date) and to pay interest on the unpaid principal amount hereof to the registered owner hereof at said office or agencies at the rate per annum specified in the title of this Bond, until maturity, or, if this Bond shall be duly called for redemption, until the redemption date, or, if the Company shall default in the payment of the principal amount of this Bond, until the Company's obligation with respect to the payment of such principal shall be discharged as provided in the Indenture (hereinafter defined). Except as hereinafter provided, this Bond shall bear interest from the interest payment date next preceding the date of this Bond to which interest has been paid, unless this Bond is dated on an interest payment date, in which case from the date hereof; or unless this Bond is dated prior to the first interest payment date in respect hereof, in which case from July 15, 1995, and except that if this Bond is delivered on a transfer or exchange of or in substitution for one or more Bonds of this Series (hereinafter defined) it shall bear interest from the last preceding date to which interest shall have been paid on the Bond or Bonds of this Series in respect of which this Bond is delivered (except that if this Bond is dated between the record date (hereinafter defined) for any 8 5 interest payment date and such interest payment date, then from such interest payment date; provided, however, that if the Company shall default in the payment of interest due on such interest payment date, then from the next preceding interest payment date to which interest has been paid on the Bonds of this Series, or if such interest payment date is the first interest payment date for Bonds of this Series, then from July 15, 1995). The interest so payable on any interest payment date will, subject to certain exceptions provided in the Indenture, be paid to the person in whose name this Bond is registered at the close of business on the record date, which shall be the "Regular Record Date" as defined in the Authority Trust Indenture (hereinafter defined), applicable to the regular interest payment date of any Bond of this Series, if it were an "Interest Payment Date" as defined in the Authority Trust Indenture. Both the principal of and the interest on this Bond shall be payable in any coin or currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. This Bond is one of the Bonds of the Company, known as its First Mortgage Bonds, issued and to be issued in one or more series under and equally and ratably secured (except as any sinking, amortization, improvement or other fund, established in accordance with the provisions of the Indenture, may afford additional security for the Bonds of any particular series) by a certain Indenture of Mortgage and Deed of Trust, dated as of April 1, 1947 (hereinafter called the Original Indenture), made by the Company to The Chase National Bank of the City of New York (The Chase Manhattan Bank (National Association), successor), as Trustee (hereinafter called the Trustee), and by certain indentures supplemental thereto, including the Forty-fifth Supplemental Indenture dated as of July 15, 1995 (the Original Indenture and said indentures supplemental thereto herein collectively called the Indenture and said Forty-fifth Supplemental Indenture hereinafter called the Supplemental Indenture), to which Indenture reference is hereby made for a description of the property mortgaged, the nature and extent of the security, the rights and limitations of rights of the Company, the Trustee and the holders of said Bonds and of the coupons appurtenant to coupon Bonds under the Indenture and the terms and conditions upon which said Bonds are and are to be issued and secured, to all of the provisions of which Indenture and of all such supplemental indentures in respect of such security, including the provisions of the Indenture permitting the issue of Bonds of any series for property which, under the restrictions and limitations therein specified, may be subject to liens prior to the lien of the Indenture, the holder, by accepting this Bond, assents. To the extent permitted by and as provided in the Indenture, the rights and obligations 9 6 of the Company and of the holders of said Bonds and coupons (including those pertaining to any sinking or other fund) may be changed and modified, with the consent of the Company, by the holders of at least 75% in aggregate principal amount of the Bonds then outstanding, such percentage being determined as provided in the Indenture; provided, however, that in case such changes and modifications affect one or more but less than all series of Bonds then outstanding, they shall be required to be adopted only by the affirmative vote of the holders of at least 75% in aggregate principal amount of outstanding Bonds of such one or more series so affected; and further provided, that without the consent of the holder hereof no such change or modification shall be made which will extend the time of payment of the principal of, or of the interest or premium, if any, on this Bond or reduce the principal amount hereof or the rate of interest or the premium, if any, hereon, or affect any other modification of the terms of payment of such principal or interest, or premium, if any, or will permit the creation of any lien ranking prior to or on a parity with the lien of the Indenture on any of the mortgaged property, or will deprive the holder hereof of the benefit of a lien upon the mortgaged property for the security of this Bond, or will reduce the percentage of Bonds required for the adoption of changes or modifications as aforesaid. This Bond is one of a series of Bonds designated as the First Mortgage Bonds, 7 3/4% Series due 2020-B, of the Company (herein called Bonds of this Series) limited, except as otherwise provided in the Indenture, in aggregate principal amount to $19,000,000 and issued under and secured by the Supplemental Indenture. The Bonds of this Series have been issued by the Company and delivered to the Authority Trustee to evidence and secure its obligation to pay to the Beaver County Industrial Development Authority (hereinafter called the Authority) a portion of the Company's share of the purchase price for certain air and water pollution control facilities and sewage and solid waste disposal facilities used in connection with the operation of Beaver Valley Power Station Unit 2, a nuclear powered generating unit located in Shippingport, Pennsylvania (hereinafter called the Project Facilities), such portion being in an amount equal to the principal of the Authority Bonds issued pursuant to the Beaver Valley Pollution Control Facilities Agreement dated as of April 1, 1974, among the Authority, the Company, The Cleveland Electric Illuminating Company, Duquesne Light Company, Ohio Edison Company and Pennsylvania Power Company. That portion of the Company's share of the cost of the Project Facilities was originally financed with proceeds from the sale by the Authority of certain bonds, which were refunded from the proceeds of one series of Collateralized Pollution Control Revenue Refunding Bonds, Series 10 7 1995-B (The Toledo Edison Company Beaver Valley Project) (herein called the Authority Bonds) issued pursuant to a Trust Indenture, dated as of July 15, 1995 (herein called the Authority Trust Indenture), between the Authority and Society National Bank, as trustee, (herein called the Authority Trustee). The Bonds of this Series have been assigned by the Authority to the Authority Trustee as security for the payment of the principal of and premium, if any, and interest on the Authority Bonds and have been delivered by the Company on behalf of the Authority directly to, and registered in the name of, the Authority Trustee. In the event any Authority Bonds shall be surrendered to the Authority Trustee or other person for cancellation pursuant to the Authority Trust Indenture (except upon exchange for other Authority Bonds), Bonds of this Series equal in principal amount to such Authority Bonds shall be deemed to have been paid, but only when and to the extent (a) so noted on the Schedule of Payments hereon by one of the agencies of the Company hereinabove specified and (if such agency is not the Trustee) written notice by such agency of such notation has been received by the Trustee or (b) such Bond is surrendered to and cancelled by the Trustee as provided in the next paragraph; and in the event and to the extent the principal of (or premium, if any) or interest on any Authority Bonds shall be paid or deemed to be paid, an equal amount of principal (or premium, if any) or interest, as the case may be, payable with respect to an aggregate principal amount of Bonds of this Series equal to the aggregate principal amount of such Authority Bonds shall be deemed to have been paid, but, in the case of such payment of principal, only when and to the extent (i) so noted on the Schedule of Payments hereon by one of the agencies of the Company hereinabove specified and (if such agency is not the Trustee) written notice by such agency of such notation has been received by the Trustee or (ii) this Bond is surrendered to and cancelled by the Trustee as provided in the next paragraph. When any such payment of principal of this Bond is made, this Bond shall be surrendered by the registered owner hereof to an agency of the Company for such notation and notification or to the Trustee for cancellation. In the event that this Bond shall be deemed to have been paid in full, this Bond shall be surrendered to the Trustee for cancellation. In the event that this Bond shall be deemed to have been paid in part, this Bond may, at the option of the registered owner, be surrendered to the Trustee for cancellation, in which event the Trustee shall cancel this Bond and the Company shall execute and the Trustee shall authenticate and deliver Bonds of this Series in autho- 11 8 rized denominations in aggregate principal amount equal to the unpaid balance of the principal amount of this Bond. The Bonds of this Series are subject to mandatory redemption by the Company prior to maturity, upon not less than 30 days prior notice, in whole or in part at any time, all as more fully provided in Section 1 of Article II of the Supplemental Indenture, in the event the Company exercises its option to direct the redemption of Authority Bonds pursuant to Section 4.01(a) of the Authority Trust Indenture, and an equivalent principal amount of Authority Bonds are being concurrently called for redemption, at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date fixed for redemption. The Bonds of this Series are also subject to mandatory redemption by the Company prior to maturity at any time (a) in whole upon notice of the occurrence of an event of default under the Authority Trust Indenture and of the acceleration of the payment of the principal of the Authority Bonds or (b) in whole or in part upon a final determination by any federal judicial or administrative authority that interest on the Authority Bonds is includable for federal income tax purposes in the gross income of the holders of the Authority Bonds (other than because a holder is a "substantial user" of the Project Facilities or a "related person" thereof, as those terms are used in Section 147(a) of the Internal Revenue Code of 1986, as amended) and an equivalent amount of Authority Bonds are being concurrently called for redemption, in each case as provided in Section 2 of Article II of the Supplemental Indenture, at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date fixed for redemption. The Bonds of this Series are also subject to mandatory redemption by the Company prior to stated maturity, all as more fully provided in Section 1 of Article II of the Supplemental Indenture, in whole or in part, on any date on or after November 1, 2005, in the event that and to the extent that the Company exercises its option to direct the redemption of Authority Bonds pursuant to the Authority Trust Indenture, and an equivalent principal amount of Authority 12 9 Bonds are being concurrently called for redemption, at redemption prices, plus accrued and unpaid interest if any, to the redemption date as follows:
REDEMPTION PRICE (EXPRESSED AS A PERCENTAGE REDEMPTION PERIODS OF THE PRINCIPAL AMOUNT (DATES INCLUSIVE) BEING REDEEMED) ---------------------------------------------------------------- November 1, 2005 through October 31, 2006 102 % November 1, 2006 through October 31, 2007 101 November 1, 2007 and thereafter 100
Any redemption of the Bonds of this Series shall be made in accordance with the applicable provisions of Sections 5.02, 5.03, 5.04 and 5.05 of the Original Indenture, unless and to the extent waived in writing by the registered owner or owners of all Bonds of this Series and such waiver is filed with the Trustee. If this Bond shall be called for redemption and payment of the redemption price shall be duly provided by the Company as specified in the Indenture, interest shall cease to accrue hereon from and after the date of redemption fixed in the notice thereof. The principal of this Bond may be declared or may become due before the maturity hereof, on the conditions, in the manner and at the times set forth in the Indenture, upon the happening of a default as therein defined. This Bond is transferable by the registered owner hereof in person or by his or her duly authorized attorney at the office or agency of the Company in The City of New York, upon surrender and cancellation of this Bond, and thereupon a new fully registered Bond or Bonds of this Series and maturity, for the same aggregate principal amount, in authorized denominations, will be issued to the transferee in exchange therefor, as provided in the Indenture. The Company and the Trustee and any paying agent may deem and treat the person in whose name this Bond is registered as the absolute owner hereof for the purpose of receiving payment and for all other purposes. This Bond, alone or with other Bonds of this Series and maturity, may in like manner be exchanged at such office or agency for one or more new fully registered Bonds of this Series and maturity, in authorized denominations, of the same aggregate principal amount. Upon each such transfer, exchange and re-exchange, the Company will not require the payment of any charges, other than for any tax or other governmental charge required to be paid by the Company in connection therewith. In the event less than all of the Bonds of this Series at the time 13 10 outstanding are called for redemption, the Company shall not be required (a) to register any transfer or make any exchange of any such Bond for a period of 15 days before the mailing of the notice of redemption of any such Bond, (b) to register any transfer or make any exchange of any such Bond so called for redemption in its entirety, or (c) to register any transfer or make any exchange of any portion of any such Bond so called for redemption. No recourse under or upon any covenant or obligation of the Indenture, or of any indenture supplemental thereto, or of this Bond, for the payment of the principal of or the interest on this Bond, or for any claim based thereon, or otherwise in any manner in respect thereof, shall be had against any incorporator, subscriber to the capital stock, stockholder, officer or director, as such, of the Company, whether former, present or future, either directly, or indirectly through the Company or any predecessor or successor corporation or the Trustee, by the enforcement of any subscription to capital stock, assessment or otherwise, or by any legal or equitable proceeding by virtue of any constitution, statute, or otherwise (including, without limiting the generality of the foregoing, any proceeding to enforce any claimed liability of stockholders of the Company based upon any theory of disregarding the corporate entity of the Company or upon any theory that the Company was acting as the agent or instrumentality of the stockholders), any and all such liability of incorporators, stockholders, subscribers, officers and directors, as such, being released by the holder hereof, by the acceptance of this Bond, and being likewise waived and released by the terms of the Indenture. This Bond shall not be valid or become obligatory for any purpose until the certificate of authentication endorsed hereon shall have been signed by The Chase Manhattan Bank (National Association) or its successor, as Trustee under the Indenture. 14 11 IN WITNESS WHEREOF, THE TOLEDO EDISON COMPANY has caused this Bond to be signed in its name by its President or a Vice-President, manually or in facsimile, and its corporate seal to be impressed or imprinted hereon and attested by a manual or facsimile signature of its Secretary or an Assistant Secretary. Dated THE TOLEDO EDISON COMPANY By Vice President. Attest: Secretary. 15 12 [FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION] This Bond is one of the Bonds of the series designated herein, described in the within-mentioned Indenture. THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), AS TRUSTEE By Authorized Officer. [FORM OF SCHEDULE OF PAYMENTS] SCHEDULE OF PAYMENTS
AGENCY OF THE UNPAID COMPANY PRINCIPAL PRINCIPAL PREMIUM INTEREST MAKING AUTHORIZED DATE PAYMENT AMOUNT PAYMENT PAYMENT NOTATION OFFICER TITLE - ------------ ---------- ---------- -------- --------- ---------- ----------- ------
[END OF FORM OF BOND OF THIS SERIES] 16 13 All conditions and requirements necessary to make this Supplemental Indenture a valid, legal and binding instrument in accordance with its terms and to make the Bonds of this Series, when duly executed by the Company and authenticated and delivered by the Trustee, and duly issued, the valid, binding and legal obligations of the Company, have been done and performed, and the execution and delivery of this Supplemental Indenture have been in all respects duly authorized; NOW, THEREFORE, THIS SUPPLEMENTAL INDENTURE WITNESSETH: That The Toledo Edison Company, the Company herein named, in consideration of the premises and of One Dollar ($1.00) to it duly paid by the Trustee at or before the ensealing and delivery of these presents, the receipt whereof is hereby acknowledged, does hereby covenant and agree to and with the Trustee and its successors in the trust under the Indenture, for the benefit of those who shall hold the bonds to be issued hereunder and thereunder, as hereinafter provided, as follows: ARTICLE I CREATION AND DESCRIPTION OF BONDS OF THIS SERIES SECTION 1. A new series of bonds to be issued under and secured by the Indenture is hereby created, to be designated as First Mortgage Bonds, 7 3/4% Series due 2020-B (such bonds herein referred to as the "Bonds of this Series"). The Bonds of this Series shall be limited to an aggregate principal amount of $19,000,000, excluding any Bonds of this Series which may be authenticated in exchange for or in lieu of or in substitution for or on transfer of other Bonds of this Series pursuant to any provisions of the Original Indenture or of this Supplemental Indenture. The Bonds of this Series shall be substantially in the form hereinbefore recited. SECTION 2. All Bonds of this Series shall mature May 1, 2020 and shall bear interest from July 15, 1995 at the rate of 7 3/4% per annum payable semiannually on the same dates as interest is payable on the Authority Bonds. SECTION 3. Both principal and interest shall be payable, so long as the registered owner of the Bonds of this Series is the Authority Trustee, at the agency of the Company in the City of Cleveland, State of Ohio, but if and when the registered owner of the Bonds of this Series is not the Authority Trustee, shall be payable at the office or agency of the Company in The City of New York; and both principal and interest shall be payable in any coin or 17 14 currency of the United States of America which at the time of payment is legal tender for the payment of public and private debts. SECTION 4. The Bonds of this Series shall be issued only as fully registered Bonds in denominations of $100,000 and any integral multiple thereof. SECTION 5. Bonds of this Series shall be transferable and exchangeable for other Bonds of the same series at the office or agency of the Company in The City of New York, in the manner and upon the terms set forth in sec. 2.05 of the Original Indenture, but notwithstanding the provisions of sec. 2.08 of the Original Indenture, no charge shall be made upon any transfer or exchange of Bonds of said series other than for any tax or taxes or other governmental charge required to be paid by the Company. In the event less than all of the Bonds of this Series at the time outstanding are called for redemption, the Company shall not be required (a) to register any transfer or make any exchange of any such Bond for a period of 15 days before the mailing of the notice of redemption of any such Bond, (b) to register any transfer or make any exchange of any such Bond so called for redemption in its entirety, or (c) to register any transfer or make any exchange of any portion of any such Bond so called for redemption. SECTION 6. The person in whose name any Bond of this Series is registered at the close of business on any record date (as defined in the text of the Form of Bond of this Series set forth in this Supplemental Indenture) with respect to any interest payment date shall be entitled to receive the interest payable on such interest payment date notwithstanding the cancellation of such registered Bond upon any transfer or exchange thereof subsequent to the record date and prior to such interest payment date, except if and to the extent the Company shall default in the payment of the interest due on such interest payment date, in which case such defaulted interest shall be paid to the person in whose name such Bond (or any Bond or Bonds of this Series issued, directly or after intermediate transactions, upon transfer or exchange or in substitution thereof) is registered on the date of payment of such defaulted interest or on a subsequent record date for such payment if one shall have been established as hereinafter provided. A subsequent record date may be established by the Company by notice mailed to the holders of Bonds of this Series not less than 10 days preceding such record date, which record date shall be not more than 15 days prior to the subsequent interest payment date. 18 15 SECTION 7. Except as provided in this Article I, every Bond of this Series shall be dated and shall bear interest as provided in sec. 2.04 of the Original Indenture; provided, however, that, so long as there is no existing default in the payment of interest on said Bonds, the holder of any Bond of this Series authenticated by the Trustee between the record date for any interest payment date and such interest payment date shall not be entitled to the payment of the interest due on such interest payment date and shall have no claim against the Company with respect thereto; provided, further, that, if and to the extent the Company shall default in the payment of the interest due on such interest payment date, then any such Bond shall bear interest from the interest payment date next preceding the date of such Bond to which interest has been paid or, if the Company shall be in default with respect to the interest due on the first interest payment date of such Bond, then from July 15, 1995. SECTION 8. The Bonds of this Series may be executed by the Company and delivered to the Trustee and, upon compliance with all applicable provisions and requirements of the Original Indenture in respect thereof, shall be authenticated by the Trustee and delivered (without awaiting the filing or recording of this Supplemental Indenture) in accordance with the written order or orders of the Company. ARTICLE II REDEMPTION OF BONDS OF THIS SERIES SECTION 1. The Bonds of this Series shall, in the manner provided in Article 5 of the Original Indenture, be subject to redemption by the Company prior to maturity, as follows: (a) In the event the Company exercises its option to direct the redemption of Authority Bonds upon the occurrence of any of the events described in Section 4.01(a) of the Authority Trust Indenture, in whole or in part, in each case at a redemption price of 100% of the principal amount, plus accrued interest to the date fixed for redemption; or (b) In whole or in part on any date on or after November 1, 2005, in the event that and to the extent that the Company exercises its option to direct the redemption of Authority Bonds pursuant to Section 4.01(c) of the Authority Trust Indenture, at redemption prices equal to the following percentages of the principal amount to be redeemed, plus accrued interest to the date fixed for redemption: 19 16
REDEMPTION PRICE (EXPRESSED AS A PERCENTAGE REDEMPTION PERIODS OF THE PRINCIPAL AMOUNT (DATES INCLUSIVE) BEING REDEEMED) ---------------------------------------------------------------- November 1, 2005 through October 31, 2006................................... 102 % November 1, 2006 through October 31, 2007................................... 101 November 1, 2007 and thereafter.......... 100
Any redemption under this Section 1 shall occur only upon receipt by the Trustee of a certificate of the Company to the effect that (i) the Company has given notice to the Authority Trustee that the Company is exercising its option to direct redemption of Authority Bonds as provided in Section 4.01(a) or 4.01(c) of the Authority Trust Indenture and (ii) an equivalent principal amount of Authority Bonds are being currently called for redemption. Such certificate shall specify the principal amount of the Bonds of this Series to be redeemed, shall have attached to it a copy of said notice to the Authority Trustee and shall specify the redemption date of such Bonds of this Series, which redemption date shall not be less than 45 days from the date of the Trustee's receipt of such certificate and shall be the same as the redemption date specified in the attached notice for the Authority Bonds being concurrently redeemed. SECTION 2.(a) The Bonds of this Series shall be subject to mandatory redemption by the Company in whole at any time prior to maturity if the Trustee shall receive a written demand from the Authority Trustee for redemption of all Bonds of this Series held by the Authority Trustee, stating that an "event of default" under the Authority Trust Indenture has occurred and is continuing and that payment of the principal of the Authority Bonds has been accelerated; provided, however, that the Bonds of this Series shall not be redeemed under this Section 2(a) in the event that prior to the date fixed for redemption: (i) the Trustee shall have received a certificate of the Authority Trustee (a) stating that there has been a waiver of such acceleration or (b) withdrawing said written demand, or (ii) if an event of default under Section 9.01 of Article 9 of the Original Indenture shall have occurred and be continuing, there has been an acceleration of the principal of the Bonds of this Series. Any such redemption shall be made on a date selected by the Company not more than 45 days after receipt of the written demand at a redemption price of 100% of the principal amount to be redeemed, plus accrued interest to the date fixed for redemption. 20 17 (b) The Bonds of this Series shall also be subject to special mandatory redemption by the Company in whole or in part at any time at a redemption price of 100% of the principal amount thereof, plus accrued interest to the date fixed for redemption, at the earliest practicable date selected by the Authority Trustee, after consultation with the Company, but in any event no later than 180 days following the Authority Trustee's notification of a Determination of Taxability (as defined in the Authority Trust Indenture). Any special mandatory redemption hereunder shall be made only upon receipt by the Trustee of a certificate of the Company to the effect that the Company is delivering moneys to redeem Bonds of this Series in order to provide the Authority Trustee with the moneys needed to redeem Authority Bonds in accordance with Section 4.01(b) of the Authority Trust Indenture. Such certificate shall specify the principal amount of Authority Bonds to be redeemed and the redemption date of the Bonds of this Series, which date shall be the same as the redemption date for the Authority Bonds being concurrently redeemed. SECTION 3. The provisions of sec.5.02, sec.5.03, sec.5.04 and sec.5.05 of the Original Indenture shall be applicable to Bonds of this Series, provided that upon deposit with the Trustee of money to redeem Bonds of this Series, such money shall be immediately available for payment. SECTION 4. The holder of each and every Bond of this Series issued hereunder hereby agrees to accept payment thereof prior to maturity on the terms and conditions provided for in this Article II. ARTICLE III PAYMENT DEEMED MADE OF BONDS OF THIS SERIES SECTION 1. In the event any Authority Bonds shall be purchased by the Company and surrendered by it to the Authority Trustee for cancellation or shall be otherwise surrendered to the Authority Trustee for cancellation pursuant to the Authority Trust Indenture (except upon exchange for other Authority Bonds), Bonds of this Series equal in principal amount and maturity to the Authority Bonds so surrendered shall be deemed to have been paid, but only when and to the extent that (a) such payment of the principal amount of such Bonds of this Series shall be noted by an agency of the Company on the Schedule of Payments on such Bonds of this Series and (if such agency is not the Trustee) written notice by such agency of such notation shall have been received by the Trustee or (b) such Bonds of this Series shall have been 21 18 surrendered to and cancelled by the Trustee as provided in Section 3 of this Article III. SECTION 2. In the event and to the extent the principal of or premium, if any, or interest on any Authority Bonds shall be paid out of funds held by the Authority Trustee or out of any other funds or shall otherwise be deemed to be paid, an equal amount of principal of or premium, if any, or interest on, as the case may be, Bonds of this Series shall be deemed to have been paid, but in the case of such payments of principal on such Bonds of this Series, only when and to the extent that (a) such payment of the principal amount of such Bonds of this Series shall be noted by an agency of the Company on the Schedule of Payments on such Bonds of this Series and (if such agency is not the Trustee) written notice by such agency of such notation shall have been received by the Trustee or (b) such Bonds of this Series shall have been surrendered to and cancelled by the Trustee as provided in Section 3 of this Article III. SECTION 3. When payment of any principal amount of a Bond of this Series shall be deemed to have been made as provided in Section 1 or 2 of this Article III, the registered owner thereof shall surrender such Bond to an agency of the Company for notation and notification or to the Trustee for cancellation as provided in said Section. All Bonds of this Series which shall be deemed to have been paid in full as provided in said Section 1 or 2 shall be surrendered to the Trustee for cancellation and the Trustee shall forthwith cancel the same. In the event that part of a Bond of this Series shall be deemed to have been paid as provided in said Section 1 or 2, the registered owner may at its option surrender such Bond to the Trustee for cancellation, in which event the Trustee shall cancel such Bond and the Company shall execute and the Trustee shall authenticate and deliver, without charge to the registered owner, Bonds of this Series in such authorized denominations as shall be specified by the registered owner in an aggregate principal amount equal to the unpaid balance of the principal amount of such surrendered Bond. ARTICLE IV THE TRUSTEE SECTION 1. The Trustee accepts the trusts created by this Supplemental Indenture upon the terms and conditions in the Original Indenture and in this Supplemental Indenture set forth. The recitals in this Supplemental Indenture are made by the Company only and not by the Trustee. Each and every term and condition contained in Article 13 of the Original Indenture shall apply to 22 19 this Supplemental Indenture with the same force and effect as if the same were herein set forth in full, with such omissions, variations and modifications thereof as may be appropriate to make the same conform to this Supplemental Indenture. SECTION 2. The Company shall cause any agency of the Company, other than the Trustee, which it may appoint from time to time to act as such agency in respect of the Bonds of this Series, to execute and deliver to the Trustee an instrument in which such agency shall: (a) Agree to keep and maintain, and furnish to the Trustee from time to time as reasonably requested by the Trustee, appropriate records of all transactions carried out by it as such agency and to furnish the Trustee such other information and reports as the Trustee may reasonably require; and (b) Certify that it is eligible for appointment as such agency and agree to notify the Trustee promptly if it shall cease to be so eligible; provided, however, that the Company, in lieu of causing any such agency to furnish such an instrument, may make such other arrangements with the Trustee in respect of any such agency as shall be satisfactory to the Trustee. SECTION 3. The Trustee shall advise the Company, promptly, in writing of the notation or receipt of written notice of notation on or cancellation of any Bond of this Series provided for in Article III of this Supplemental Indenture. ARTICLE V MISCELLANEOUS PROVISIONS SECTION 1. The Original Indenture, as heretofore supplemented, is in all respects ratified and confirmed, and the Original Indenture, this Supplemental Indenture and all other indentures supplemental to the Original Indenture shall be read, taken and construed as one and the same instrument. Neither the execution of this Supplemental Indenture nor anything herein contained shall be construed to impair the lien of the Indenture on any of the property subject thereto, and such lien shall remain in full force and effect as security for all bonds now outstanding or hereafter issued under the Indenture. All covenants and provisions of the Original Indenture, except as modified by this Supplemental Indenture and all other indentures supplemental to the Original Indenture, shall continue in full force and effect for the respective periods of 23 20 time therein specified, and this Supplemental Indenture shall form part of the Indenture. All terms defined in Article 1 of the Original Indenture shall, for all purposes of this Supplemental Indenture, have the meanings in said Article 1 specified, except as modified by this Supplemental Indenture and all other indentures supplemental to the Original Indenture and unless the context otherwise requires. SECTION 2. This Supplemental Indenture may be simultaneously executed in any number of counterparts, and all said counterparts executed and delivered, each as an original, shall constitute but one and the same instrument. IN WITNESS WHEREOF, The Toledo Edison Company has caused its corporate name to be hereunto affixed, this instrument to be signed by its President or a Vice President and its corporate seal to be hereunto affixed and attested by its Secretary or an Assistant Secretary for and in its behalf and The Chase Manhattan Bank (National Association), as Trustee, in evidence of its acceptance of the trust hereby created, has caused its corporate name to be hereunto affixed, this instrument to be signed by its President or a Vice President and its corporate seal to be hereunto affixed and attested by its Secretary, an Assistant Secretary or a Corporate Trust Officer, for and in its behalf, all as of the day and year first above written. 24 S-1 THE TOLEDO EDISON COMPANY By TERRENCE G. LINNERT Vice President [SEAL] Attest: J.T. PERCIO Secretary Signed, sealed and acknowledged on behalf of The Toledo Edison Company in the presence of PATRICIA BARKEY Patricia Barkey SONDRA CLARKE Sondra Clarke As witnesses THE CHASE MANHATTAN BANK (NATIONAL ASSOCIATION), as Trustee, By VALERIE DUNBAR Vice President Attest: KATHLEEN PERRY Corporate Trust Officer Signed, sealed and acknowledged on behalf of The Chase Manhattan Bank (National Association) in the presence of ELSIE TASSINI Elsie Tassini DELLA K. BENJAMIN Della K. Benjamin As witnesses [SEAL] 25 S-2 STATE OF OHIO ) COUNTY OF CUYAHOGA ) ss: On this 4th day of August, 1995, before me personally appeared TERRENCE G. LINNERT and J. T. PERCIO to me personally known, who being by me severally duly sworn, did say that they are a Vice President and the Secretary, respectively, of The Toledo Edison Company, that the seal affixed to the foregoing instrument is the corporate seal of said corporation and that said instrument was signed and sealed in behalf of said corporation by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said corporation. AMY B. MCCABE Notary Public Amy B. McCabe Notary Public, State of Ohio Recorded in Cuyahoga County My commission expires October 23, 1999 [SEAL] STATE OF NEW YORK ) COUNTY OF NEW YORK ) ss: On this 7th day of August, 1995, before me personally appeared VALERIE DUNBAR and KATHLEEN PERRY to me personally known, who being by me severally duly sworn, did say that they are a Vice President and a Corporate Trust Officer, respectively, of The Chase Manhattan Bank (National Association), that the seal affixed to the foregoing instrument is the corporate seal of said association and that said instrument was signed and sealed in behalf of said association by authority of its Board of Directors; and said officers severally acknowledged said instrument to be the free act and deed of said association. DENIS KELLY Notary Public Denis Kelly Notary Public, State of New York No. 01KE5032197 Qualified in Kings County Commission Expires August 22, 1996 [SEAL] THIS INSTRUMENT PREPARED BY BRUCE T. ROSENBAUM, ATTORNEY AT LAW. 26 R-1 This page contains information as to recording and filing which was not set forth in this Supplemental Indenture at the time of execution. This page is not a part of this Supplemental Indenture. RECORDING AND FILING DATA This Supplemental Indenture was filed for record and recorded in the record of mortgages in the offices of the Recorders of the following Counties:
FILED FOR COUNTY VOLUME PAGE(S) RECORD - ------------------------- ---------- ------------ --------------------- Ohio Belmont................ 641 674 August 16, 1995 Defiance............... 326 692 August 16, 1995 Erie................... 234 810 August 16, 1995 Fulton................. 331 846 August 16, 1995 Henry.................. 271 527 August 16, 1995 Lake................... 1147 558 August 16, 1995 Monroe................. 15 163 August 16, 1995 Ottawa................. 460 219 August 16, 1995 Paulding............... 294 299 August 16, 1995 Putnam................. 582 297 August 16, 1995 Sandusky............... 482 233 August 16, 1995 Seneca................. 514 819 August 16, 1995 Williams............... 352 957 August 16, 1995 Wood................... 1020 1050 August 16, 1995 Pennsylvania Beaver................. 1382 2 August 15, 1995
MICROFICHE ------------------------------ Lucas, Ohio.......... 95-1668A01 August 16, 1995
An amendment to a previously filed financing statement and a counterpart of this Supplemental Indenture were filed in the office of the Secretary of the Commonwealth of Pennsylvania on August 15, 1995 under original or amendment file number 07851362, microfilm number 24581784, to comply with the filing requirements of the Pennsylvania enactment of the Uniform Commercial Code. EX-27.C 11 EXHIBIT 27.C
UT THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE RELATED FORM 10-Q FINANCIAL STATEMENT FOR THE TOLEDO EDISON COMPANY AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENT. 0000352049 THE TOLEDO EDISON COMPANY 1,000 U.S. DOLLARS 9-MOS DEC-31-1995 JAN-01-1995 SEP-30-1995 1 PER-BOOK 1,984,939 150,743 298,291 1,002,266 0 3,436,239 195,687 602,116 (52,471) 745,332 5,020 210,000 1,081,857 0 0 0 57,426 1,665 60,371 39,288 1,235,280 3,436,239 667,257 33,404 486,360 519,764 147,493 12,196 159,689 84,770 74,919 13,986 60,933 0 71,778 199,498 0 0
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